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Netflix Stock Price Bombs — Can They Recover?
By Christopher Weaver

Today trading goes wild after Netflix’s quarterly earnings report, and the word is sell, sell, sell. Netflix stock price took a major hit, dropping 34% to $77.93 per share, which is a drastic shift from the around $300 price of Neflix stock back in July. Financial institutions like CitiGroup and J.P. Morgan have since downgraded the stock, effectively decreasing its value even further. Put these facts together, and that will illustrate how 20 million shares of Netflix stock changed hands today.

How could this happen to the once ruler of the streaming space? According to Janney Capital Markets it is due to the fact that Netflix is facing rising costs for content and losing customers due to their recent “lack of direction”. Netflix is not worried and are playing a longer game. The recent split of the DVD by mail and streaming businesses will allow Netflix to make better deals going forward, since they can negotiate streaming and DVD deals separately. Also, Netflix is continuing to invest in their future in places like the U.K. and Ireland. It costs money to expand, and therefore profits would tend to be lower.

We here at allGeek know that what Netflix has achieved is quite extraordinary. They have paved the way for new up-and-comers, and I think that the Netflix loyalists out there will continue to pay until Netflix’s dying breath, I know I will.

If you’d like to hear exactly what went on in Netflix’s quarterly earnings meeting, you can listen to the whole event here.

[Via:Reuters]


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