If you watch TV and many people do, the most popular shows for very good reasons are coming from Netflix. Those popular shows have encouraged 6 million subscribers around the global to pay for Netflix to increase their total number of subscribers to over 130 million people.

This growth is why the stock has been on a tear and the competition of Disney, Fox, AT&T and Time Warner, Comcast, Amazon, Apple, Google to increase their own spending on TV and video. As a consumer, it is a wonderful time to be a consumer.

As an investor, Jeff Sommer of the New York Times News Service asks it Netflix worth the price of the shares. In many ways you maybe an owner because Netflix is part of the FAANG group – Facebook, Amazon, Apple, Netflix and Google (which trades as Alphabet). Many indexes and funds own the FAANG group and have profited from it,  Netflix poses a difficult problem for investors – the movies and TV shows people love cost millions. To fuel the expansion, Netflix has been spending faster than the cash comes in or it relies on junk-rated debt. The company expects this to continue until 2020 or beyond at that time Netflix will not need to borrow money to pay its bills and profit will grow.

Not everyone believes in the forecasts, New York University professor Aswath Damodaran (check his videos on You Tube and read his blog) believes the business model seems unsustainable. Professor Damodaran posted a valuation model for Netflix based on the discounted cash flow approach. The Professor believes although the shares trade around $300, they are worth $177.

Professor Damodaran believes for Netflix to continue it has to grow, to grow it has to maintain its high costs to produce quality videos and TV shows. Netflix spent $11.7 billion on new content; total revenue was $14.7 billion which left $3.2 billion to pay for marketing and operating costs. The company borrowed $2 billion on top of the $8.3 billion it already owes in the form of bonds.

Another analyst Michael Nathanson an analyst at MoffettNathanson estimated the stock was worth $210. Michael Pachter, managing director of research at Wedbush Securities believes $150 is more realistic.

There are others who believe in Netflix and the price has fallen from $400 to $300 believe it is a good time to buy.

Linking to dividend paying stocks, if you ask people in your circle they will likely know of Netflix and could be a subscriber. Netflix is valuable because it has 130 million subscribers. How price sensitive are they? What would make them not renew? they are questions that help you determine if the critics are correct. The competition is always the competition, most of us can only watch one show at a time and there is great competition for our viewing eyes. If you do not own directly, perhaps it is good time to see how the $300 barrier will be tested. Does the stock go up or down? As a dividend buyer, you have time to wait.

There are more questions than answers, till the next time – to raising questions.