In the News! Netflix Stock: Overall Steady Decline

15 Jul

Since announcing an upcoming price increase of subscription fees, Netflix shares officially rose by 0.31 points, or 0.11 percent, after closing at $286.93, on the NASDAQ Stock Market Friday, July 15th, 2011. Netflix shares managed to stay out of the negative after experiencing an all day decrease in value.

An overall stock decline following the shocking announcement on July 12th, 2011 brings Netflix shares down a total of -3.81 points and -1.31% in just four days. TradersHuddle.com reports of investors cashing in profits as the future of investing in Netflix’s stock may be uncertain.

Netflix (NASDAQ:NFLX) is under pressure this morning after its price action was unable to break above the $300 mark, and investors are starting to take profits in this high momentum stock. Netflix announced earlier this week that it will be raising its prices by making specific changes to its unlimited streaming option and DVD plans. The news so far didn’t prompted a rally in the stock as Netflix customers could get hit with as much as 60% that makes it a bit too fast and too big of an increase that could prompt attrition. There have been several reports from multiple analysts of the increasing content cost that Netflix will have to deal with, as more competition forms and content producers demanding higher prices.

Source: TradersHuddle.com

The backlash on social networking websites alone is speculated to be anticipated by Netflix, and experts weigh in on the company’s strategy to lure users away from mixed media packages and raise overall profits by customers downgrading plans to instant stream only. According to an article on TheStreet.com, a greater number of instant streaming subscriptions may help Netflix lower their total spending for providing content.

“Netflix has been forthright about its ultimate goal to become a streaming company. Separating the DVD and streaming subscriptions is yet another turn of the wrist to convince subscribers to abandon the disc.”

According to Wedbush analyst Michael Pachter,

“By bifurcating its subscriber base into streaming and non-streaming plans, the company may be able to successfully argue that a lesser number of subscribers access streaming content, and may be able to control streaming content costs.”

Source: TheStreet.com

Although a stock decline is bad news for Netflix, their competitors are seeing a slight rise in investments. Blockbuster Inc. stock rose by 20% today, Coinstar Inc., owner of Redbox Video increased by 1.24%, and the Amazon.com stock rose 1.18%.

 

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One Response to “In the News! Netflix Stock: Overall Steady Decline”

  1. chasingbeta October 15, 2011 at 4:34 am #

    Awesome blog I found here about penny stocks.

    Thanking You.

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