Netflix Stock Drop Explanations

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). 

Netflix has now lowered subscriber numbers expectations for Q4. Netflix CEO Reed Hastings explains the lower subscriber numbers with the price hike back in /4/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.”