Netflix is in the news for a few days now, and the news is not good. The stock took a major hit over the past days and went down to $155.00.
Where is that stock going? Well, Netflix was for while the top address for movies (I wonder why). They had a good business model, though. For a low fixed price one could watch movies in DVD format. Clearly, the price and the service provided was outstanding. However, it wasn’t very difficult to figure out that DVD mailing is not the future of watching movies. A stock price of $200 and above (as promoted by Wall Street Analysts) was already ridiculous.
Things changed with Netflix entering the streaming business. All of the sudden the price for the customer doubled. You can have the DVD business for a few bucks and also get the streaming business for a 100% upgrade in price. Bummer.
Looking at the events of the past months, the entire setup of this strategy change was a mess and failed miserably. Combined with the ongoing news in the industry, most not at all good for Netflix, the company is running the risk of disappearing in the category of meaningless. Cleaning out terrible mistakes in strategy, marketing and PR, losing some major contract for movies, growing number of other players that now stream movies, Amazon and even Wal-Mart, besides others, make life for Netflix miserable.
Without giving any advice (read the disclaimer), this stock is going into the basement, way below $100.00. Once it has arrived there, we will see how the company can settle in, or not. Netflix might disappear all together.
Please read disclaimer.