Morgan Stanley Maintains Equal-weight on Netflix

Morgan Stanley has published a research report on Netflix NFLX after the company announced its plans to raise $400M in capital through a $200M common stock sale to T. Rowe Price Associates TROW. In the report, Morgan Stanley writes, "We believe Netflix will continue to be volatile and range bound until investors receive more clarity on the ROI of the company's investment cycle (When will profitability return? What does the sub growth acceleration curve look like abroad? Have the domestic content issues stabilized?). Net paid sub adds will be the most important metric going forward as each new paid sub will provide a much needed stream of cash to meet content obligations." Morgan Stanley maintains its Equal-weight rating on Netflix, which is currently trading down $2.04 from yesterday's $74.47 closing price.