There is a simple reason why Netflix (NASDAQ: NFLX) might collapse – it is still not making any money. Disturbingly the latest ycharts data indicates that Netflix’s problems are actually getting worse.

Netflix reported a negative cash from operations number of -$1.59 billion (-€1.42 billion) on March 31, 2017. That’s right folks; Netflix lost more than one and a half billion dollars from its operations during the first quarter of 2017.

If that was not bad enough Netflix has been losing money on its operations for more than two years, ycharts data indicates. The last time the digital video service reported a positive cash-from-operations figure was December 2014. To make matters worse those losses have grown every quarter since September 2014.

Is Netflix Losing $100 million (€89.14 million) a quarter?

In September 2014, Netlfix reported generating $96.39 million (€85.92 million) in cash from operations. That fell to $16.48 million (€14.69 million) in December 2014, -$147.26 million (-€131.27 million)in March 2015, -$543.12 million (-€484.13 million) in September, 2015, -$749.44 million (-€668.04 million) in December 2015, -$850.65 million (-€758.26 million) in March 2016, -$1.16 billion (-€1.03 billion) in September 2016, -$1.47 billion (-€1.31 billion) in December 2016 and -$1.59 billion (-€1.42 billion) in March 2017.

If these numbers are accurate Netflix has been losing over $100 million (€89.14 million) a quarter on its’ operations for two straight years. One has to wonder how long the company can go on like that.

These numbers also call some of the other numbers on Netflix’s latest earnings report into serious question. For example the “net income” of $337.24 million (€300.61 million) and the profit margin of 6.76%. How can a company that admits to losing $100 million (€89.14 million) a quarter be turning a profit, this enquiring mind wants to know?

Nor is it just cash from operations that indicates a loss, Netflix reported a “free cash flow” of -$396.38 million (-€353.33 million) on March 31, 2017. That number exceeds the net income of $337.24 million (€300.61 million). It looks as if Netflix is running serious losses and losing a lot of money.

Is Netflix Making no Money?

Netflix’s earnings report is actually scary because it shows that the company’s operations are losing money. Instead it appears to be borrowing money to stay afloat, which is bad.

Even though the cash from operations was negative, cash from financing was positive; Netflix reported making $1.101 billion (€1.101 billion) financing on March 31, meaning that it borrowed the money it needs to cover expenses.

What’s worse is that it appears Netflix is also raiding its bank account to cover operating expenses. Back in March 2015, Netflix had $2.958 billion (€2.64 billion) in cash and short-term investments; that number fell to $2.072 billion (€1.85 billion) in March 2016 and $1.341 billion (€1.20 billion) in March 2017.

It looks as if Netflix is slowly eating its own resources just to stay in business. The company has no float, instead it simply burns up whatever cash it can find or borrow to keep the lights on. There’s no way that can continue and it looks like the death spiral to me, or at least the beginning of one.

Is Netflix in the Death Spiral?

Despite that Netflix is not in a real death spiral because of its fantastic revenue growth.

The video streaming service added $2.051 billion (€1.83 billion) in revenues over the course of 2016. Netflix started 2016 with $6.78 billion (€6.04 billion) in revenues and finished with $8.831 billion (€7.87 billion) in revenues. That number grew again to $9.51 billion (€8.48 billion) in March 2017, meaning that Netflix added $679 million (€605.25 million) in revenues during first quarter 2017.

If my calculations are accurate Netflix is adding over half a billion dollars in revenues every quarter. The problem is that it seems to be spending around $500 million (€445.69 million) to add a half a billion dollars in revenues. Every dollar the company seems to make flies right back out.

The streaming giant has figured out how to generate the opposite of float. Each time its subscription base grows it makes more money. This sounds a lot like Amazon (NASDAQ: AMZN) but Amazon makes money of its operations. The big difference is that Amazon has dozens of streams of revenue, Netflix has just one monthly subscriptions and that’s not covering the operating expenses.

Is Netflix a Good Investment?

My take is that Netflix is a horrendous investment because it is grossly overpriced; shares were trading at $157.70 (€140.57) on May 24, 2017, and losing far too much money. Despite that there is some serious value here because of Netflix’s subscriber base.

There were 98.75 million Netflix streaming video subscribers worldwide at the end of first quarter 2017, Statista reported. What’s more impressive is that number has been growing significantly for quite some time.

Netflix added 16.8 million subscribers in 2016; it started the year with 81.5 million subscribers and finished with 98.3 million. That growth is also part of a long term trend back in third quarter 2011; Netflix had just 22.9 million streaming video subscribers.

Best of all 50.85 million of those subscribers were in one of the world’s healthiest economies the United States, Statista pointed out. That means Netflix is well-positioned to cash in on any economic recovery in the USA.

There was one number at Netflix that is in serious decline and it is DVD rentals. The number of US DVD subscribers fell from 11.17 million in 2011 to 4.11 million in 2016. This might be causing some losses because those subscribers pay monthly subscription fees.

Can Netflix Survive YouTube

The subscription figures show that Netflix has a lot of potential value and it is successfully fighting off the competition from free video services like Alphabet’s (NASDAQ: GOOGL) YouTube. YouTube is Netflix’s biggest competitor and the biggest threat to its existence.

YouTube has over a billion users, almost one third of all internet users, an Alphabet Inc. (NASDAQ: GOOGL) press release claimed. It also reaches 95% of the internet population by broadcasting in 76 different languages.

YouTube on mobile alone reaches more 18 to 49 year old viewers than any cable network in the United States, Google boasted. To add icing to the cake the number of YouTube channels generating six figures in revenues a year increased by 50% in 2016.

The ability to compete with a free service like YouTube makes Netflix a value investment. Just not a value investment for average people, instead Netflix would be a great value investment for a company like Disney (NYSE: DIS) which can use it as a distribution channel for video content. A big problem Netflix has is that it has to pay organizations like Disney for most of its content; so Disney, and not Netflix makes the money.

Average investors should stay away from Netflix because it is ludicrously overpriced and pays no dividend. Expect Netflix to collapse and get acquired at some point. Also expect this stock to fall to its real value, I would put that at $16 (€14.26) a share not $157.70 (€140.57). If the price falls that low; Netflix will quickly get acquired by a cable company, a telecom or a large entertainment conglomerate.

A slightly different version of this article previously appeared at Market Mad House.