Netflix Flirts with 52 Week Low on Threats, Stock Crashing 9.5%
Netflix (NASDAQ:NFLX) is off nearly 9.5% after the stock broke through technical support of $125 yesterday. Problems for Netflix may include that Amazon’s (NASDAQ:AMZN) new Kindle will let users stream movies, and Microsoft (NASDAQ:MSFT) will get some pay TV content from Comcast (NASDAQ:CMCSA) and Verizon (NYSE:VZ) streamed to its Xbox Live.
Motley Fool’s Rick Aristotle Munarriz says, “Would Amazon love to have Netflix’s 21.8 million domestic streaming customers and its more than a million international streaming subscribers? Sure. Would Amazon love to have the home theater gadget penetration? Absolutely. Is there content available through Netflix.com that Amazon would love to have? You know it.
However, at the end of the day, Netflix (NASDAQ:NFLX) is striking new content deals at a healthy pace this month because studios now know that their content isn’t being devalued given Netflix’s new $7.99 a month pricing. These same studios aren’t going to want to be part of a freebie given to folks paying $79 a year for free two-day shipping through Amazon.com.
What would the plan be if Amazon (NASDAQ:AMZN) bought Netflix? It can’t just fold it into the Prime freebie, yet it’s already marketing Kindle Fire on the premise of access to 11,000 video titles at no additional cost.
In short, Amazon has moved on. It has learned to live without Netflix, despite the obvious appeal on some levels.
Netflix, on the other hand, is a company that saw its stock trading for more than $300 just two months ago. Subscribers and shareholders may be upset, but analysts haven’t done a whole lot of hacking away at their profit targets. In other words, the fundamentals aren’t deteriorating at the same pace as the share price. Why would Netflix sell itself for anything close to today’s price?”
Netflix’s (NASDAQ:NFLX) stock is down 9.5% to $115 on the news. Shares are down 34.22% year to date. The stock has traded in a 52-week range between $115.21 and $304.79.