Netflix stocks fall as members flee
The turbulent stock market has been tough on just about everyone this year, and Netflix is certainly no exception to the rule. According to the New York Times, as of Thursday morning, the company’s stock fell “almost 15 percent in heavy trading,” its lowest point yet in 2011.
The news may not come as a big surprise to subscribers, who have been up in arms all summer about the company’s price increase, as well as having to choose between the DVD and streaming plans. Netflix was expected to have 3 million subscribers use the DVD mail service, but the number will now be closer to 2.2 million. Meanwhile, streaming-only subscribers saw a drop, as well, with 200,000 less using the service than anticipated.
While the Wall Street Journal noted that, “Netflix cut its domestic subscriber forecast Thursday by 1 million users, indicating it no longer expects its U.S. customer base to grow during the current quarter after a pricing change angered many members,” the company reassured that they still stood by the service and its recent controversial changes. In a letter written to shareholders, Netflix stated, “Despite the guidance revision, we remain convinced that the splitting of our services was the right long-term strategic choice.”
So does this spell big trouble for Netflix? Will more users — and shareholders — continue to leave? Or is it simply a temporary blip as subscribers adjust to the changes? Share in the comments section below.