Netflix Shares Sink 36% |
| Wall Street Journal - Oct 25, 2011 |
Netflix Inc. shares traded around $75 for the first time in 18 months, a 36% plunge Tuesday that continues a dramatic tumble that has erased about $12 billion from the company's market value in just 104 days.
Netflix shares were down 36% Tuesday morning, trading around $75 for the first time in 18 months, in the wake of subscriber defections and forecasts for quarterly losses.
The declines follow Netflix quarterly earnings report, in which profit and revenue were up sharply but the video-rental company was haunted by its decision to raise prices and its admittedly botched effort to divorce rentals of DVDs from streaming video services. Those moves caused more than 800,000 subscribers to flee in the third quarter and removed a lot of goodwill with investors.
"We made a couple of big mistakes this year," said Reed Hastings, Netflix's chief executive. "It's up to us to own up to those mistakes and to move forward."
Netflix added to investor concerns by projecting that it would begin losing money for a few quarters starting in the first period of 2012, because of costs associated with an expansion in the United Kingdom and Ireland.
Following the company's quarterly report Monday evening, Netflix shares were down 36% in Tuesday morning trading on the Nasdaq Stock Market, to $76. The stock is down more than 75% from its all-time high of $304.79 on July 13, the day after the company announced the price changes.
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- Posted: 2011-10-25 11:19:15
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