Netflix Attracting Controversy On CNBC Today (NFLX)

A furious debate between bulls and bears over red-hot Netflix NFLX has been unfolding on CNBC on Friday. Hank Greenberg, Jim Cramer, and an Oppenheimer analyst just wrapped up a debate on the Closing Bell. The analyst is bullish on the stock while Greenberg is bearish. In fact, Greenberg believes NFLX could fall by 75% next year. Cramer loves the company and the Netflix story, but thinks the stock may have gotten ahead of itself. He has advised viewers of Mad Money to take half their NFLX position off the table. Earlier in the day, on CNBC's Strategy Session, noted short-seller Manuel Asensio outlined a very bearish thesis on the stock and said that he has been short since August, taking big unrealized losses in the process. Benzinga has previously reported that Whitney Tilson's hedge fund T2 Partners is short NFLX and is also sitting on big unrealized losses on the position. In addition, we recently noted that the company's CFO sold about $17 million in NFLX stock above $200. It is very hard to justify NFLX's valuation unless the company can continue to add subscribers at a torrid pace and does not see margin compression due to increasing competition and content costs. The stock trades at a trailing P/E of 70.67, a forward P/E of 49, and a PEG ratio of 2.51. The fact remains, however, that investors who are short this stock based on a fundamental thesis, that may or may not come to fruition, have been absolutely destroyed. Those that have followed the price action in this name, on the other hand, are sitting on giant profits. If you are looking to enter either a long or short position in NFLX, you may want to watch price action for a few more days. Trying to analyze the fundamentals in this name has been an absolutely useless endeavor thus far, just ask Whitney Tilson and Manuel Asensio. Not very many companies have fundamentals that can justify their stocks trading at 70, 80, or even 100 times earnings, but many of these seemingly expensive stocks continue to scream higher and are producing huge gains for more technically oriented traders.