Shark is with us. Bob, kick it off to you about netflix. Missed subguisens three of the last four quarters. Is the story changing . The real question on the price value allegationship for the consumer. Blaming this, the grandfathering price basing basically going up. Saw an unexpected amount of turn. Interesting there, it wasnt actually on the people that had their prices raised. It was on other people that were their prices would be raised and in turn before that yeah. Odd explanation. People scratches heads, what was going on there . More importantly, international also underperformed expectations. Thats the big growth driver of this stock. Street looking for around 2. 6 or 2. 7 million. Back to the original question. Has the story changed for the worse . I think more question marks what their growth trajectory can be and why were neutral and stayed neutral until they actually show the churn is under control and can add grows adds and internationally a price value relationship there,
Why did you do this . Well, you know, we had been looking at herbalife in the industry really since 2004, since we started our firm in 2003. It was always a fascinating story. Right . There were always sleazy things going on in the background, our opinion, and always an industry we thought was harming people, yet over the years they seemed to be growing rabidly. Not just herbalife, but the whole industry, an industry we realized coopted up a critics. Coopted the internet. Type in herbalife scam, knnuski someone coopting. Never heard the story. Obviously coopted wall street. Nobody with a sell recommendation. Two analysts that cover the industry, and they had coopted the government in that so much money had gone into the system that the government just was, had been because its and paid for and finally coopted the ftc. It the government regulators role to protect consumers and nobody was doing that and didnt make for a good short at all. The industrys going through 150 billion, dominant
Up noorn more than 20 . People going towards the stocks. The question, is there going to be a potential cut in dividends. I dont believe so and utilities have ban great performer the last number of years. The hunt for yields is going to continue and the oneyear to 1. 48. Look, in utilities, theyre a special sector, because theyre a regulated entity. Theyll get enough to pay those dividends. See a massive recession, depression that will shut down terms of need for electricity and so forth. They can do fine. Tickle the energy cost coming down. Look at materials, however, stocks like php, i dont see how they maintain div gends going forwa dividends Going Forward. More worried about that. Energy could come down more. Basically okay. Theyll come down. You still need dividends. Telecos . Who knows . Major disruption there. And in some respects, joe, try to get what could be coming. Gdp report, disappointing, business dropoff. People wondering if that forecasts a recession. If business spendi
Lets put on the fang trade. I think each of these companies specifically scott had something idiosyncratic and important an its own road map that sparked interest beyond just the last 90 days. Doc, facebook crushed it. Alphabet, mobile search driving. Amazon, the obvious thing, plus the cloud. These are not small revenue numbers were talking about here, judge. When looking at alphabet or google, up 25 year over year, the revenue side. This is a huge amount of revenue. This isnt like, you know, some of the stocks we talk about that, oh, it was 100 million and they beat by 1. 2 million dollars. No. These are in the billions. This is like appleesque kinds of numbers, and as people come on the air and like to say, the law of large numbers says they cant keep doing yes, they can, and yes, they did. And take a look at amazon. One important point on that, jon. We used to talk about these names, reverently, we would say, these are the companies that are going to figure out the future, and you
Create hes taking a lot of heat. This is an unquestioned big victory. This was a 2. 6 billion score. Take a look at this name. They first got into it in september of 2011. They built the stake over a course of a month or so with prices ranging at about 63 with the average price 55. After putting new direct orreor the board and being involved with that, they began selling stock 6 million shares in late 2013 at about 142 a share so theyre up about 90. Two more sales in the years that followed at a higher price range and then the 9. 8 million share yesterday. They made most of their profits, roughly 2 billion on the stocks performance but they also benefitted from a currency hedge. They will use the proceeds of the sale to make one or more new investments in the main Fund Although not necessarily through a special vehicle. The timing couldnt be better. The fund is down about 19 through july thanks in large part to the awful performance of val ent pharmaceuticals and then theres herbalife.