“Netflix Inc shares plunged 38 percent in pre-market trading after its weak outlook spooked investors and prompted several analysts to cut their recommendation on the stock,” Arpita Mukherjee reports for Reuters.
“On Monday, the company warned of more cancellations as it grapples with the fallout from a price increase and other unpopular moves,” Mukherjee reports. “The company that shook up Hollywood with its DVD-by-mail service has seen its shares plummet since July, when it announced a price rise for subscribers who wanted both DVDs and streaming. A wave of cancellations hit the company that had been famous for red-hot growth and loyal customers.”
Mukherjee reports, “Netflix — which is trying to recover from the roughest patch in its nearly 15-year history as it moves to emphasize online streaming of television and movies — has forecast a loss for the first quarter of 2012 as it spends more to expand into Europe… Netflix shares were trading at $74.05 in pre-market trade on Tuesday. They closed at $118.84 on Monday on Nasdaq.”
Read more in the full article here.
MacDailyNews Take: We never really understood Netflix’s popularity beyond those deeply committed to ripping DVDs. It always seemed anachronistic to us to be waiting and snail-mailing physical media back and forth, and their streaming offerings were/are underwhelming, to say the least. We’re one group that Netflix won’t ever have to worry about losing as it stumbles and bumbles, potentially on its way out.