Netflix raises prices, loses customers, stock price plummets
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Everyone had an opinion about what would happen when Netflix raised prices well beyond reason this year. This was a company on the rise, adding customers by the millions with stock going for $200 a share. Everyone in the major content generation business hated them and customers loved them.
I was one of the latter. Then my plan went from $16 per month to almost $21 a month with no increased service value.
If you predicted that Netflix was going to suffer for that greed, then pop a bottle of bubbly and pat yourself on the back. If you own Netflix stock, open a beer and cry in it. Netflix announced it lost 600,000 subscribers in the most recent quarter after estimating growth of 1,000,000. Netflix stock dropped almost 19% today, down $39.46 in after hours trading. That's a loss of about $2 billion in value in eight hours.
Follow the link for the full story at the Los Angeles Times.
Update: Netflix CEO Reed Hastings addressed this mess in a post on the company's blog. His plans for the future include game rental (will cost extra) and other planned screwups.
Update 2: Netflix announced that it lost another 800,000 customers in the 3rd quarter (2012). Their stock has lost over $200 in value since July.
September 29, 2011 12:52 PM | Reply