I saw that in this morning's report and if we put the idea into perspective, very little of it has merit. The idea was floated in the blogger news by only one of many analysts following the Netflix saga. The analyst conveniently forgot history where 11 months ago Hastings said he planned to do this split. We just didn't know when. There is still one important factor in the Netflix market that is missing because we don't have any data yet. That is the number of subscriber gains in the 43 new countries including Canada that Netflix recently turned on. Next year Netflix plans to expand into Asia and Europe. This is why the company has a real growth ahead now. The loss of revenue for the 1 million US subscribers is small potatoes compared to where they are planning to be in 2 years. The only real thing that has changed is the short term perspective and the hugely bad press they have gotten over all of this. Generally people are dollar foolish and penny wise. They panic and cancel a service they used for $8 a month so they can have a lower quality service with fewer selections for $10 a month with a company that has a track record of raising prices every February. I suspect these are the same people who buy lottery tickets thinking they have a good chance to win. They don't know math! Those who really don't use the service and cancelled are indeed justified. I suspect many of them got into Netflix during the free month promo and never cancelled plus forgot they were signed up because most never saw the Netflix $9.99 charge on the CC. But with 30 seconds of every minute in the news about how awful Netflix was in price increases, it made them look, and they saw a way to afford two cups of coffee each month at Starbucks.
It was only a matter of time before Netflix take over rumors get started. Are these rumors bad? Probably not because what I see is it arrested the plummeting stock and has raised some future projections, by one analyst from $100 a share to $155. For now it looks like the stock has bottomed out. Time to buy a little and see where it will go over the next week. With Dish announcement tomorrow, I do expect it to fall a bit more. Just have to keep in mind this massive stock falling is due to panic in a really volatile market caused not by the wall street economy but rather the government intervention, doomsday reporting, and not accomplishing anything. The least little negative news by anyone nobody has ever heard of causes a stock to fall off the cliff. The least little negativity from people we do know, like the FED chairman, causes the entire market to fall off the cliff, like the past two days. Next week we will be headed to the rumors of government shutdown, again, and again as our government continues to squabble. Meanwhile people continue to shop, people continue to buy and companies continue to rack up cash reserves afraid to hire because the government fails to govern. In the smaller scale- I continue to get my Netflix BD and I continue to see more and more movie selections show up on my Netflix.
