Netflix Turns to Ads to Free Itself From ‘Value Trap’

Netflix Turns to Ads to Free Itself From ‘Value Trap’

Netflix Inc.’s stock has looked cheap for months and yet buyers discovered to their dismay that it just kept getting cheaper.

Now bulls say the video-streaming giant is on the verge of proving that it’s an actual value stock and not a value trap.

The launch of a much-anticipated advertising supported service this year, plus a crackdown on password sharing

could help reverse the company’s shocking subscriber losses and provide a new revenue stream, the thinking goes. 

“All of these factors could help put Netflix back on a lasting multiyear growth trajectory

and there is a strong likelihood investors will reward that with a higher multiple,”

said Pedro Palandrani, director of research at Global X ETFs. 

Investors will have to look past some more bumpy days: The company

which has more than 200 million subscribers, reports second-quarter results after the close Tuesday