Netflix Stock news

The Fall Brings Netflix Stock Price To Rise

Another day, another price of the shares of Netflix Swan Dive - down another 35 percent on Tuesday. How can I explain the fall of grace beautiful Los Gatos company?

One way would be to look at certain items in the report earnings Monday, and where Netflix really has the most money.

No, this is not the CEO Reed Hastings "alpha and omega, streaming video is the old standby, DVD rental, as Hastings observes unwanted orphan status.

This is what subscribers is projected to continue to the fourth quarter, according to company estimates, between 30 million and $ 42 million. DVD rental: Between $ 177 000 000 and $ 192 million. The profit margin on older: 8 percent. On this last point: 50 percent.

It 'true that DVD rentals are declining in popularity streaming will be available in more viewers. But Netflix does not explain the net loss of 803 000 subscribers in the third quarter, down from 23.79 million to 24.59 million in the prior quarter.

The price increase of 60 percent in July and the failed attempt to separate from service DVD and call Qwikster do.

"We appreciate very upset many members of Netflix home with significant changes for the price of the DVD, and, to a lesser extent, and proposed to withdraw the rebranding is now our DVD service," Hastings wrote in a letter to investors. "The main problem is the many long-term vision, shocked members of changing prices, and most of them have expressed that canceling Netflix than we expected."

They definitely did.

The company also lost subscribers who supplied the DVD rental with a streaming service. They were "not using streaming to pay $ 7.99 for it," Hastings wrote in the letter.

We appreciate very upset many members of Netflix home with significant changes for the price of the DVD, and, to a lesser extent, and proposed to withdraw the rebranding is now our DVD service," Hastings wrote in a letter to investors. "The main problem is the many long-term vision, shocked members of changing prices, and most of them have expressed that canceling Netflix than we expected."

He has done.

The company has also lost its subscribers, which included a DVD rental with the streaming service. They were "not sufficient to use the stream to pay about $ 7.99," Hastings wrote in the letter.

Hastings remains resolutely optimistic. Streaming is the wave of the future "is our chance to be one of the leaders of this transformation with the subscription video streaming best on the planet," he told shareholders. "Our long option After streaming is as convincing as ever. "

Others are not so sure.

"The new base line (subscriber) measures are worrisome, the credibility of management is in ruins ... content costs are rising and it is clear that the accounts of companies in DVD for the vast majority of the profits, "wrote Tony Wible, an analyst at Janney Capital Markets in a research note Tuesday.

In an e-mail interview, said that the companies' cash flow suggests that streaming lose money and that is why they needed to increase prices for the content of invoices entered wanted to pay the bill for subscribers.

"They did not, mainly because I think Netflix is ​​cheap rental brand does not ask for more money."

Car Talk: Bill Ford, great grandson of Henry Ford, will be at the Commonwealth Club in San Francisco on Thursday, talking about the future of his company car - which was not rescued - and taking into electric cars, government regulations and new vehicle technologies. Ford, former CEO of the company, now chief executive, had much to do with their survival and success, while others have failed.