Netflix stock dropped 20% in trading yesterday. Why? Here are some answers.
Netflix stock NFLX stock dropped almost 20% yesterday. This is a $86.89 drop in a single day. The main reason for the sharp drop are the disappointing new subscriber numbers for the 3rd quarter. Netflix added 2 million new subscribers internationally (2.36m expected) and 975,000 in the US (1.33m expected).
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Netflix has now lowered subscriber numbers expectations for Q4. Netflix CEO Reed Hastings explains the lower subscriber numbers with the price hike back in May by $1.
Besides the subscriber number issue the announcement of HBO on Wednesday has an impact here too. HBO will offer a stand-alone streaming service next year. This could become a serious problem for Netflix. The big drop in the Netflix stock is also attributed to the fact that it was rising quite a bit since May. It had added over $120 in value.
Watch Jim Cramer on his Mad Money show going through what just happened to the Netflix Stock. He calls it "Anatomy of a disaster."
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