Back in July I was telling you about Netflix and its remarkable stock price ascension. At the time, its price was rising rapidly with a price flirting with $300, and it was overall looking like a good bet (click on the chart to your right). If the author was to be believed, it was a great bet. Indeed, the stock price rose 60 points in the week following that post (did our loyal readers run out and bid the price up?).
So let this be a lesson about getting your stock tips from The Atlantic, things can change pretty fast these days. Today I pick up my local computer and Netflix shareholders — the ones who haven’t bailed, that is — are bemoaning a stream of remarkable decisions that have kneecapped the company’s stock price, sending it into a free fall back toward $100 per share.
UPDATE: During the time I was writing this post, the stock price opened 40 points lower at about $75. Wow. Here it is in real time.
Of course, this could be one of those cases where Netflix management is taking the long view instead of grubbing for short-term profits. The original argument is that there were significant barriers to entry in streaming content, and that seems to be what management still believes — no close substitutes, no potential entrants with the same type of content.
This will likely make its way into both IO and the Senior Read. A very interesting situation, indeed.