Monday August 22, 2011

Netflix's Battered Stock: What Next?

Netflix's stock is down $100 (from $305 to $205) since the company announced the new price hikes last month. Although the company is trying to save face by saying it "anticipate the backlash," I don't think anyone knew the stock would be hit this hard. eek!

Netflix tried to downplay the hostile reaction by customers to the increase, but many thousands if not millions of customers took to the Web to complain. Netflix isn't disclosing how many customers cancelled their subscriptions as a result but, it seems like a safe bet that more subscribers will the drop service in coming weeks, especially when they find the new charges on their statements. Netflix says it anticipated the backlash and also predicted that the incident would blow over by the fourth quarter.