Netflix Drops $6 BIllion Share Value On Slowed Subscriptions

 

Netflix losing $6 billion in market value after results, again

Netflix Inc.'s NFLX, -13.13% stock plunge, which is on course to be the second-biggest one-day price decline in its history, has wiped away nearly $6 billion in market value. The stock tumbled $13.96, or 14%, toward the lowest close since Feb. 8, after video streaming service reported second-quarter results late Monday. With about 428.3 million shares outstanding, according to FactSet, the selloff is shaving $5.98 billion from Netflix's market cap. Co-founder and Chief Executive Reed Hastings, who owned 6.16 million shares as of July 1, according to FactSet, could be losing about $86 million. The stock's tumble currently ranks second to the $14.06 loss it suffered on April 19, 2016--it lost about $6 billion in market cap on that day--after the company reported first-quarter results. Netflix's stock went public in May 2002.

Netflix, Inc.

NASDAQ: NFLX - Jul 19, 7:59 PM EDT

85.84USD12.97 (13.13%)

After-hours: 85.950.11 (0.13%)

1. 1 day
2. 5 day
3. 1 month
4. 3 months
5. 1 year
6. 5 years
7. max

Open	85.43
High	86.75
Low	84.50

Mkt cap	36.92B
P/E ratio	266.63

Netflix Inc. may have learned to take price hikes slowly after a previous debacle, but a more cautious approach has not kept the company from feeling the wrath of consumers who simply do not want to pay more for its streaming service.

Netflix NFLX, -13.13%  revealed Monday that it added slightly less than 1.7 million new subscribers in the second quarter on a net basis, after projecting that membership would grow by 2.5 million. The shortfall included just 160,000 additions in the United States, the lowest quarterly total since Netflix began reporting those figures in 2012, and 1.52 million overseas, the smallest international growth since the second quarter of 2014.

With streaming services becoming more ubiquitous and an ambitious international expansion still in its infancy, Netflix’s sudden decline — just last quarter, the company added four times as many new members — seems shocking on its face, and investors sent shares tumbling more than 13% in late trading as a reaction. However, the reason is obvious and has been expected in some circles: Higher monthly subscription costs for customers are causing cancellations.

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