Ethel Jiang, provided by
Published 3:13 pm CST, Friday, January 11, 2019
Netflix stock plunging as other networks begin creating their own streaming businesses. move is part of a larger trend by content producers to lessen their reliance on big streaming services like Netflix.Netflix stock plunging as other networks begin creating their own streaming businesses. move is part of a larger trend by content producers to lessen their reliance on big streaming services like Netflix.
Photo: Matt Rourke, STF
Photo: Matt Rourke, STF
- Netflix posted strong third-quarter earnings and subscriber growth on October 16, but shares tanked more than 36% over the following two months as the broader tech sector came under pressure.
- After bottoming at $231.23 in late December, Netflix shares have surged by more than 45%.
- The company’s recent rebound is overreacted in the eyes of short seller Andrew Left.
- Netflix’s market-capitalization gain over the past 12 days equals 12 DreamWorks Animations, 12 Lionsgates, 10 Rokus, or 5 Hulus, Left said.
- Watch Netflix trade live.
A look at the top titles coming to Netflix this October, from Talladega Nights to Stranger Things
Netflix investors have too much confidence in the stock and lack adequate judgment, the short-seller Andrew Left’s Citron Research said Friday.
“NFLX investors at this level as blind as Bird Box,” Citron Research wrote in a tweet. The firm said shares would fall back to the $300 level — more than 10% below Netflix’s Friday closing price. Bird Box is a Netflix movie that stars Sandra Bullock as a mother who’s trying to protect her children after a supernatural force that kills you if you see it wipes out most of humanity.
Shares of the video-streaming giant have been on a roller-coaster ride in recent months.
On October 16, the company posted strong third-quarter earnings and subscriber growth, but shares tanked more than 36% over the following two months as the broader tech sector came under pressure. At the time, Bernstein analyst Todd Juenger linked the rising interest-rate environment, which tends to penalize companies, like Netflix, that are short of cash.
After bottoming at $231.23 on December 24, Netflix shares have rebounded by more than 40%. The gains have come after the Federal Reserve said its future rate hikes were not on a preset course.
The stock’s recent rally is too much, in the eyes of Left. Netflix’s market capitalization has soared by $45 billion over the past 12 days, the equivalent of 12 DreamWorks Animations, 12 Lionsgates, 10 Rokus, or 5 Hulus, Citron said.
But Wall Street is bullish on the tech giant.
“After six months of stock underperformance & key debates emerging about competition, margins & [free cash flow], we think these debates are better understood by investors and reflected in the current stock price,” UBS analysts said on Thursday. The bank has a “neutral” rating and $400 price target.
Netflix was up 56% in the past twelve months.
Travis Clark contributed to this story.
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