October 15, 2004: Headlines: COS - Swaziland: Business: Silicon Valley: Computers: Internet: Reuters: Reed Hastings' Netflix shares tumble after surprise strategy shift

Peace Corps Online: Directory: Swaziland: Special Report: RPCV Reed Hastings: Reed Hastings: Archived Stories: October 15, 2004: Headlines: COS - Swaziland: Business: Silicon Valley: Computers: Internet: Reuters: Reed Hastings' Netflix shares tumble after surprise strategy shift

By Admin1 (admin) (pool-141-157-21-111.balt.east.verizon.net - 141.157.21.111) on Saturday, November 06, 2004 - 2:37 pm: Edit Post

Reed Hastings' Netflix shares tumble after surprise strategy shift

Reed Hastings' Netflix shares tumble after surprise strategy shift

Reed Hastings' Netflix shares tumble after surprise strategy shift

Netflix shares tumble after surprise strategy shift
Fri Oct 15, 2004 11:31 AM ET
NEW YORK, Oct 15 (Reuters) - Shares of Netflix Inc. (NFLX.O: Quote, Profile, Research) tumbled 43 percent to a 16-month low on Friday after the online movie rental company cut prices in response to expected competition from Internet merchant Amazon.com Inc. (AMZN.O: Quote, Profile, Research) .

The stock plunged $7.47 to $9.96, its lowest level since June 2003, before rebounding slightly to $10.50 by late morning. It was the biggest percentage loser and one of the most active issues on Nasdaq.

The decline came after Netflix, which established the market for no-late-fee, mail-to-home DVD rentals, said it would cut its general subscription fee to $17.99 from $21.99 on Nov. 1.

"More value (is) lost than gained at $18 a month -- the business isn't healthy at that price," said Vintage Research analyst Alden Mahabir, who rates the stock at "sell."

The strategic shift comes as competition grows in the market from far bigger companies, such as Blockbuster Inc. (BBI.N: Quote, Profile, Research) and Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) . Netflix Chief Executive Reed Hastings said the move was also due to the expected entry of Amazon.com into the rental fray.

Netflix, which is based in Los Gatos, California, also said it would postpone roll-outs in Britain and Canada to focus on the United States.

Several Wall Street analysts lowered their opinions on Netflix, such as Jason Avilio of First Albany, who downgraded the stock to "neutral" from "buy."

Pacific Growth Equities analyst Derek Brown said he was "stunned" by the shift, and he cut his rating to "equal weight" from over weight."

"While we believe that Netflix will be able to sustain its leadership position in the market for online DVD subscription services, the cost of doing so is clearly going up substantially," he said in a note to clients.

Netflix's stock decline comes despite its report of a sharp rise in third-quarter profit and forecast that it would end 2005 with 4 million subscribers, about double the current level.

Shares of Blockbuster, which analysts say was losing some of its customers to Netflix, also slipped on Friday, off 45 cents, or 5.5 percent, at $7.51 on the New York Stock Exchange.





When this story was posted in November 2004, this was on the front page of PCOL:

Your vote makes a difference Your vote makes a difference
Make a difference on November 2 - Vote. Then take our RPCV exit poll. See how RPCV's are voting and take a look at the RPCV voter demographic. Finally leave a message on why you voted for John Kerry or for George Bush. Previous poll results here.
Kerry reaches out to Returned Volunteers Kerry reaches out to Returned Volunteers
The Kerry campaign wants the RPCV vote. Read our interview with Dave Magnani, Massachusetts State Senator and Founder of "RPCVs for Kerry," and his answers to our questions about Kerry's plan to triple the size of the Peace Corps, should the next PC Director be an RPCV, and Safety and Security issues. Then read the "RPCVs for Kerry" statement of support and statements by Dr. Robert Pastor, Ambassador Parker Borg, and Paul Oostburg Sanz made at the "RPCVs for Kerry" Press Conference.

RPCV Carl Pope says the key to winning this election is not swaying undecided voters, but persuading those already willing to vote for your candidate to actually go to the polls.

Take our poll and tell us what you are doing to support your candidate.

Finally read our wrap-up of the eight RPCVs in Senate and House races around the country and where the candidates are in their races.

Director Gaddi Vasquez:  The PCOL Interview Director Gaddi Vasquez: The PCOL Interview
PCOL sits down for an extended interview with Peace Corps Director Gaddi Vasquez. Read the entire interview from start to finish and we promise you will learn something about the Peace Corps you didn't know before.

Plus the debate continues over Safety and Security.
Schwarzenegger praises PC at Convention Schwarzenegger praises PC at Convention
Governor Schwarzenegger praised the Peace Corps at the Republican National Convention: "We're the America that sends out Peace Corps volunteers to teach village children." Schwarzenegger has previously acknowledged his debt to his father-in-law, Peace Corps Founding Director Sargent Shriver, for teaching him "the joy of public service" and Arnold is encouraging volunteerism by creating California Service Corps and tapping his wife, Maria Shriver, to lead it. Leave your comments and who can come up with the best Current Events Funny?
 Peace Corps: One of the Best Faces of America Peace Corps: One of the Best Faces of America
Teresa Heinz Kerry celebrates the Peace Corps Volunteer as one of the best faces America has ever projected in a speech to the Democratic Convention. The National Review disagreed and said that Heinz's celebration of the PCV was "truly offensive." What's your opinion and can you come up with a Political Funny?


Read the stories and leave your comments.






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Story Source: Reuters

This story has been posted in the following forums: : Headlines; COS - Swaziland; Business; Silicon Valley; Computers; Internet

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