Netflix Stock Is Going Crazy
Redemption for the red-enveloped one today. From the Merc:
After announcing it had regained most of the customers lost after a public-relations disaster, Netflix stock rocketed back to highs not seen since the mass subscriber exodus of last fall. Netflix shares increased as much as 25.6 percent Thursday morning after the Los Gatos company’s quarterly earnings report showed that it had added 610,000 subscribers in the last three months of 2011 after losing more than 800,000 subscribers in the previous three months.
The resulting stock surge, which you can see below, is causing some movie-like tales of redemption among investors. Posted on our Google+ page this morning:
“Everyone laughed at me when I bought tons of netflix at $76. Now who gets the free vacation to Italy?”
It’s been a very rough six months for Netflix. An ill-received price hike, an aborted spin-off of its DVD business, and the termination of several deals by outside content providers had left the company’s prospects looking dimmer and dimmer. But the return of more than three-quarters of the number of lost subscribers obviously has investors taking a second look, even though yesterday’s earnings report showed that year-over-year profits were actually down.