The market capitalization of Netflix shares is now greater than those of America’s most storied blue chip industrial company, General Electric (GE).
For comparison’s sake, in 2017 GE generated free cash flows of $5.6 billion, and Netflix had negative free cash flows of $2 billion.
Despite that disparity in actual business success, GE is going through management and legal turmoil, while Netflix is riding high on its status as one of the FAANG stocks. Time will tell whether investors care more about potential future cash flows, or those that actually exist today.
Jeremy Jones, CFA
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