Netflix Stock Plummets After Q3 Earnings (CHARTS)

Netflix has had a rough few months. There was the price hike in July, split off of its DVD business, then the reunion of its DVD business. Now, it's the earnings.

On Monday, Netflix revealed it lost 800,000 subscribers in the third quarter, Mashable reports, leading to a 37 percent drop in the Netflix stock overnight.

The company projects more cancellations in the future and warned of mounting costs. It's also expects to face more competition in the future from the likes of Google and Amazon.

As TechCrunch notes, the Netflix stock has been in a downward spiral since July, and until then it was seeing "massive growth." Reuter's Felix Salmon explains why the Netflix stock is so volatile.

LOOK (via Google Finance):

LOOK (via Google Finance):

Comments

[JasonMcl]

08:45 AM on 10/26/2011

It is pretty obvious that Netflix wanted to get out of the DVD distribution system. It is not only expensive to ship and sort all those DVD's but they can occasionally get lost or destroyed.

So the way Netflix goes about this is by dividing the plan into 2 parts. And the general assumption is that people will drop the DVD shipping option and keep the streaming option (which basically requires no infrastructure).

The problem is that the service went from being a ridiculously great value at 9 bucks, to being just a pretty good value at 16, and everyone just had a collective meltdown.

The Netflix streaming service is still an amazing value, and for the actual DVD's that you can't find there, that is where Redbox comes in.

[simsum]

08:54 AM on 10/26/2011

The streaming service is "an amazing value"?

Sure, if you like a small selection of mostly second-rate and obscure films.

[JasonMcl]

04:06 PM on 10/26/2011

As far as recent, hit movies, Redbox is obviously a better way to go...

But Netflix excels at old favorites from the 70's, 80's and 90's. Movies that you may have not bought on DVD and don't really feel like repurchasing them as DVD's.

I personally use it mostly for Documentaries, watching old Family Guy / American Dad Episodes, movies from the 80's and 90's and whatever else happens to look good at the time.

The reason I support this service is because when used along with hulu and Amazon VOD you can actually replace your home cable service completely for everything but sports at a fraction of the price.

It is also a great way to say FU to Comcast, Verizon and AT&T for their cable prices.

[Steve Lane]

06:36 AM on 10/26/2011

How strange ! If you treat your customers like they are fools your stock plummets! Who would have thought it.
However that tactic works for the GOP because their "customers" are fools.

[Taninthesummer]

12:31 AM on 10/26/2011

I wonder if Netflix is willing to roll loyal customers back into the DVD and streaming paradigm for...like...11.99 a month? You listening, Netflix?

[liberalbug]

10:33 PM on 10/25/2011

Looks like an upside down viagra chart.

[frank day]

09:42 PM on 10/25/2011

It all started with the Gawdawful UI they shoved down our throats.

[rastafaruni]

06:21 PM on 10/25/2011

this whole world is a chart what goes up goes down trendines supports and resistances

[farleft1917]

05:54 PM on 10/25/2011

I bought streaming and 4XDVD service from Netflix. I thought changing their name to Quikster was idiotic as Netflix is a brandname. However there's little to choose from and I think this downward spiral was coincidental with people having to cut back on their spending. Amazon's profits down a staggering 70%!
I think people are cutting back and Netflix price hike gave them the excuse to cut.

[kinogod]

05:38 PM on 10/25/2011

Buy buy buy, doubles in 12 months.

[rigmoten]

11:03 PM on 10/25/2011

Are the customers coming back? How will the price double?

[Libertardo]

05:37 PM on 10/25/2011

That is very funny. I cancelled my netflix too because of their quixster nonsense. I started a subscription because I bought a PS3, and was paying $9.99/month. What were they thinking?

And there are plenty of online television outlets that are completely free. www.thertv.eu is pretty sweet.

[kinogod]

05:41 PM on 10/25/2011

Free is seriously wrong to the creators actors musicians etc. if someone thinks unlimited streaming at $7.99 is gouging then they probably also steal content and justify it in some morally despicable way. I'm still happy paying $20 for unlimited streaming and unlimited 2 DVD out at a time mailings.

[Libertardo]

05:48 PM on 10/25/2011

Are you for real? If free is wrong, then I don't want to be right.

[excaderesdesire]

05:33 PM on 10/25/2011

good hope they bite the farm... greedy blank blank

[Phillip Flotow]

05:32 PM on 10/25/2011

Amazon has also taken a plunge. Down over 14% after hours.
I have no opinion on either of these stocks, though I do business with both. To my way of thinking, it represents a shift from stay-at-home to out-and-about among consumers. As they say, "the trend is your friend".

[NHBill]

05:21 PM on 10/25/2011

The handwriting was on the wall months ago.
When the studios announced they would not be renewing the contracts at the same rates of at all that was the time to sell!

[kinogod]

05:42 PM on 10/25/2011

And now is the time to buy fools.

[liberalbug]

10:35 PM on 10/25/2011

so you would prefer to buy high?

[dempol]

05:16 PM on 10/25/2011

Company is DOA, a victim of greed. Too bad Hastings and the rest of the insiders have already taken their profits out of the company.

[Mahi vce]

05:02 PM on 10/25/2011

So Sad that Government is not bailing out Netflix ( Sarcasm !!! ) . May they Netflix should open a Bank and then Govt will bail it out .....

[Hdaryl01]

05:12 PM on 10/25/2011

Or, Netflix could simply morph into a "bank holding company" like Goldman Sachs and become eligible for bailout largesse.