Netflix stock plummets 35% after-hours as subscribers abandon crumbling service
Netflix has fallen from grace. Hard.
From a high of $300 in July, the share price of NFLX has plunged deep into the abyss. When Netflix doubled the price of its combined DVD-and-streaming service months ago, subscribers fled. Then, when CEO Reed Hastings attempted to introduce Qwikster, investors fled. And now Netflix has released an ugly report and forecast that saw its stock plummet a further 35% to just $41, losing billions and billions in market cap.
The video streaming and DVD-by-mail service company lost nearly a million U.S. subscribers in the third quarter—as many as Canada previously gained in 6 months. This is far more than was expected, and Netflix predicts further cancellations to occur. Plus, overseas expansions are burdening the company's suddenly tight capital, causing the company to turn from profitable to experiencing losses into 2012.
Netflix's market value peaked at $16 billion July but now sits at just $4 billion.
Canadians seem to be getting more attention from Netflix but it's no longer the trusted brand it once was.
