First in line with its own DVD-by-mail offering was Blockbuster, a name synonymous with video rental. Hollywood’s best couldn’t have scripted a more menacing group of rivals for Hastings to face. Once the secret was out, rivals showed up. “If we had stayed private for another two to four years, not as many people would have understood how big a business this could be.” Once Netflix was a public company, financial disclosure rules forced the firm to reveal that it was on a money-minting growth tear. Boyle, “Questions for… Reed Hastings,” Fortune, May 23, 2007. But in 2007, Netflix founder and CEO Reed Hastings told Fortune that if he could change one strategic decision, it would have been to delay the firm’s initial public stock offering (IPO) Also known as “going public.” The first time a firm sells stock to the public. Going public is the dream in the back of the mind of every tech entrepreneur. When a firm sells stock for the first time, the company gains a ton of cash to fuel expansion and its founders get rich. Appreciate why other firms found Netflix’s market attractive, and why many analysts incorrectly suspected Netflix was doomed.Įntrepreneurs are supposed to want to go public. ![]() ![]() Recognize the downside the firm may have experienced from an early IPO.Understand the basics of the Netflix business model.After studying this section you should be able to do the following:
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