Netflix Stock Price Crashes in After-Hours Trading

I know the Netflix story is all about streaming now, but I&#x27;m kind of sad that according to the financials, Netflix&#x27;s DVD section has halved its subscribers over the last two years.<p>That service definitely seems to be degrading, almost everything in my queue has become perpetually stuck on &quot;very long wait,&quot; something rare for me of a couple years back. They&#x27;re clearly winding things down.<p>I don&#x27;t know what happens in a couple years for anyone who wants to see an old movie. The streaming libraries are still incredibly thin. New releases will be available somewhere, sure. But we&#x27;re facing the death of access for film history buffs or hardcore genre fans.

I would say mostly about the lower subscriber growth.<p>When expectations are high, if expectations aren&#x27;t met, the adjustment can be abrupt.<p>Time Warner (HBO + Warner Brothers + numerous cable channels) is in the same content&#x2F;TV distribution business, $4.3b in profit, market cap of $62b.<p>Netflix, $0.2b in profit, $5b in REVENUE, market cap of $27b (well, now $20b).<p>Netflix is competing with Amazon streaming, Apple TV&#x2F;iTunes, to a lesser extent Google, Hulu.<p>Also now HBO, they announced today they would start letting people subscribe over the Internet without a cable subscription, all the other channels are getting in the over-the-top streaming business.<p>Comcast + Time Warner Cable (different from Time Warner) are looking to merge and perform a cashectomy on Netflix via &#x27;fast lanes&#x27;, before TV subscriber losses from cord-cutting really start cutting into their flesh. (Can anyone doubt that&#x27;s about to happen? Anyone who has compared the experience of e.g. Roku with a cable box can see over-the-top is a 10x improvement in UX at a lower price. And with even HBO available over-the-top, literally the only reason left to subscribe to cable is live sports.)<p>Growth is not a given. It&#x27;s a tough landscape and no guarantee Netflix will be the last one standing.<p>$20b is still a lot of money for a company with no profits, in a fight for its life.

I think there is plenty of growth opportunity for Netflix 1- After hours trading is notorious for volatility 2- HBO announcement today 3- Subscriber growth did not meet expectations<p>Are all likely affecting the stock. However when it&#x27;s all said in done who else is competing with against netflix?

I used to be really bullish on Netflix, but then Amazon started giving Amazon Prime members streaming access to a huge collection of free TV and movies. The offerings aren&#x27;t exactly the same and each platform does have its own exclusive shows, so a huge TV fan might want both. But for a lot of people, one is enough and if that one is Amazon Prime then you get free shipping of all your Amazon deliveries as a bonus! For those of us who had already become Prime members for the shipping, Netflix has even less of a hope of competing.<p>Due to its size, Amazon can also expect to extract an better selection of streaming titles from media companies.<p>Netflix should be terrified.

It&#x27;s not a zero sum game. The only limiting factor is how much really great content can be created. When the market for premium streaming matures it&#x27;s going to effectively be what we always wished cable was. Netflix can only lose if they fail to keep going.

I find myself using Amazon Instant Videos, Vudu, and Google Play Movies more and more, so, no wonder if I&#x27;m not the only one. The DVD service is a friction, I have it, but I have DVDs with me for over 6 months, and no time to watch them and get new ones. Before that, I had a DVD with me for nearly 2 years! Weirdly, Redbox Instant just died, so, this should&#x27;ve helped Netflix by a tiny bit, but still... Why are the movie studios so greedy? People still steal their movies and torrent them, so, I&#x27;m missing a lot of movies for which I could&#x27;ve paid a premium, but having kids, and all prevents me from watching them at the premiere, so, I rent them later and they make a lot less from me and many are like me, I&#x27;m sure. It&#x27;s not about the price, it&#x27;s all about the convenience, and I hope those old crooks get this once and for all. I&#x27;m sure if people had an option to watch a new movie without going to the theater, piracy would drop significantly, but I know there are people who&#x27;d always pirate even if the movie is $0.99 - people who don&#x27;t value their time, nerves, and don&#x27;t mind the risk of getting sued, I guess.

I&#x27;m no finance expert, but looking at the graphs, hasn&#x27;t it already recovered?<p><a href="https://www.google.com/finance?q=NASDAQ%3ANFLX" rel="nofollow">https:&#x2F;&#x2F;www.google.com&#x2F;finance?q=NASDAQ%3ANFLX</a><p>The story reported it was at 339. Looks like it&#x27;s currently at 448.<p>Edit: Nevermind, didn&#x27;t notice the &quot;After Hours&quot; price in tiny-text above the graph which shows similar numbers to those reported in the story.

I think people are missing the big picture on what happened... This is not that the market is giving up on Netflix. It&#x27;s that most of Netflix&#x27;s value is based on an enormous increase in growth.<p>Taking a look at their financials [0] their PE was 139 pre-announcement. It&#x27;s still north of 100. Compare that with 27 of Google. Very high growth assumptions.<p>Another way to look at it is they are still up ~250% over the past year and a half.<p>When you&#x27;re this highly priced, there is no room for mistakes or missing Wall Street expectations.<p>One other note... There is a lot of hedge fund activity on Netflix, which can increase the immediate pop before or after a hit.<p>That said... Speaking as a subscriber... I&#x27;m still paying, but I&#x27;m not using nearly as much as I used to, and I&#x27;m using Amazon Prime more and more.<p>[0] <a href="https://www.google.com/finance?cid=672501" rel="nofollow">https:&#x2F;&#x2F;www.google.com&#x2F;finance?cid=672501</a>

The reason for this is their EPS being down by about half of the expectations: <a href="http://www.zerohedge.com/news/2014-10-15/netflix-obliterated-after-guiding-half-expected-q4-eps-streaming-adds-hit-brick-wall" rel="nofollow">http:&#x2F;&#x2F;www.zerohedge.com&#x2F;news&#x2F;2014-10-15&#x2F;netflix-obliterated...</a>

Sorry not relevant to the subject, but who is allowed to trade after-hours? How come some people are allowed to take advantage of trading while the general public is not allowed?

With so many players in the mix, I wonder if some consolidation is likely in the near future. Less streaming services with more content breadth is much more valuable to consumers than figuring out which services offer which content.

Price increase killed their U.S. growth. Hulu makes over half their money from ads, I&#x27;d expect Netflix will eventually go down that road -- $4.99&#x2F;mo or free with ads and $9.99 without.

I know comcast is more diversified, but wouldn&#x27;t this be a threat to them too? Why no effect on their after hours price?

Blame Popcorn Time. Why would people pay for far fewer selection and mediocre movies and tv shows when they can have unlimited access to every movie and tv show?

After hours trading almost always means nothing. Ignore such headlines. Reality takes place during normal trading hours. After hours is for amateurs.<p>If you want to get stupider than this article, I&#x27;ve seen some stocks trade down 50% after hours but open normal the next day.<p>Besides, the whole market took a nosedive today.<p>Means nothing.

Netflix has strong fundamentals. They could be a good buy actually considering the stock is down