Netflix Stock Drops By 37% As Members Depart
A loss of subscribers translates naturally into a loss of revenue and investors can spot a loss in dividends from a mile away. This is the cold reality Netflix woke up to recently after its stock fell by 37% after news spread that over 850,000 subscribers left the service in Netflix’s third quarter of trading.
Netflix shares were trading at a modest $75 per share, a massive drop from the previous high recorded early in the summer. Analysts are not surprised that things have descended at the pace at which they have. Even Netflix’s own management kind of anticipated this fall out. The question now is what Netflix can do to avoid a further decline in its share price.
That answer is not one that will be easy to come by. The company released a statement recently acknowledging among other things, “that the price hike might have been too ambitious and caused Netflix to be perceived as greedy”. That statement was released in large part to placate shareholders, and more will have to be done to keep existing subscribers happy or even win back lost subscribers.
If Netflix is to keep pace with the strong revenue numbers enjoyed despite the price hike, management had better get busy. The $822 million in revenues is largely due to the subscriber numbers pre and mid-hike. The full impact of the hikes have now just started to take effect and so I wouldn’t be surpised if Netflix loses another 850,000 in the fourth quarter.
Is Netflix in free fall? Let us know what you think in the comments below.
(Source: sitetrail.com)
Comments (6)
November 11th, 2011 at 03:54
I can see that you are an expert in this area. I am starting a website soon, and your information will be very useful for me.. Thanks for all your help and wishing you all the success in your business.
November 11th, 2011 at 06:05
Gamefly offer a wide variety of games, with over 7000 titles to their credit. It’s very easy to make use of their services. Just register and pick your plan and begin to rent! When you gain access to their services, you can browse their selection of games; each game page has its own summary, reviews, and even cheats.
November 11th, 2011 at 09:35
I make these with mint oreos and dip them in melted white almond bark. They are AMAZING! They taste like the mint girl scout cookes but moist and better! Oh, and for some reason the mint never requires as much cream cheese as regular oreos.
November 11th, 2011 at 11:02
I simply started reading your website – appreciate your writing. I wanted to make sure you what has not displaying correctly for the BlackBerry Browser (I get a Tour). Anyway, I’m now subscribed to the Rss on my PC, so thank you!
November 11th, 2011 at 11:10
Wow!, this was a top quality post. In theory I’d like to write like this too – taking time and real effort to make a good article… but what can I say… I keep putting it off and never seem to get something done
November 12th, 2011 at 13:43
Thanks for an interesting piece of writing. It genuinely shed light on something I was not sure about. Will book mark your web site and come back in the future.
Trackbacks - Pingbacks (0)
Leave a Reply