Some shareholders of Netflix (NFLX) may wonder if the company’s management team thinks investors are not sophisticated enough to realize that more subscribers does not necessarily mean more money. A smaller number probably wonder if it is Netflix’s own management team that is not so sophisticated. A looming disaster may rapidly transpire if the majority of shareholders at large begin to develop the same opinion.

The share price of Netflix has seen some trouble recently, but it may just be the beginning. Those tempted to think the share price is a relative bargain, should think carefully about what they are getting into. The value of NFLX shares has dropped 75% from it’s highs before, and it could do so again.

Consider the following two points. Netflix has roughly 18 million non US subscribers, but they currently lose about $12 for each of them. Netflix’s recently released original series, Marco Polo, cost $90 million and is designed to attract international subscribers. At first blush these two facts together seem to paint the picture of a self-destructive company.

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