Netflixation

posted 12.7.2010

Netlix announced today that its Chief Financial Officer (CFO) Barry McCarthy is resigning to pursue outside interests. Mr. Carthy has served in this capacity since 1999 and led the company's initial public offering (IPO) in 2002. David Wells will replace him as the new CFO, effective December 10. Mr. Wells served as the VP of financial planning and analysis, and had reported directly to Mr. McCarthy.

> read Netflix press release (pdf)

Netflixation Perspective: In a time when Netflix is negotiating billion-dollar content deals with Hollywood studios for internet streaming rights, it is not an ideal time to replace the CFO. As we commented yesterday, Netflix may be leveraging such deals with debt. With Netflix potentially going into high debt and a change in CFO, investors may not react well to these risk factors. In fact, as of after the market close today, shares were down 3% in after-hours trading, to just below $183.

Netflixation Disclosure: In the interest of full disclosure, we at Netflixation have not bought any shares of NFLX, yet, at the time of this post. Long or short.