Netflix Shares Plunge Again

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Netflix's first-quarter earnings filing received a mixed reception from analysts on Monday. Several shook their heads over the increased costs to expand internationally and to acquire -- and in some cases produce -- first-run television shows, costs that produced the company's first quarterly loss. Others, however, noted that the company appears to be attracting additional subscribers for its streaming service while reducing the number who prefer receiving discs in the mail. "We're feeling good about the progress we have made, but are conscious of the fact that it's tender and that we have to be extremely diligent and thoughtful as we build back up our brand reputation," Netflix founder and chief Reed Hastings said in a statement. But investors signaled that they were not happy. By midday today, Netflix shares had fallen 12 percent to $88.49 after closing on Monday at 101.84. "Netflix Tanks Again As Wall Street Freaks Out About Growth Forecast," headlined analyst Henry Blodget's The Daily Ticker . He quoted Felix Almon of Reuters as saying that "No matter how large Netflix gets, it will be forced to pay top-dollar for the movies and TV shows that its subscribers want to watch, and these royalty payments will eat up all of its profits."

24/04/2012


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