Netflix Shares Boosted 21% in First Week of 2012 Trading on Positive News

Netflix (NASDAQ:NFLX) kicked off the new year with a volatile week. On Wednesday, Netflix jumped on news of positive streaming data but dropped in after hours trading after Verizon (NYSE:VZ) said at a Citi conference that didn’t have an interest in purchasing a streaming services provider; rumors had been buzzing the company had its eye on Netflix.

Along with investors not feeling the Netflix love, analysts weren’t feeling so positive as Needham cut the company’s full-year earnings per share estimate to -$0.50 from $2.50. The firm noted that the company spent a lot to acquire streaming content but it wasn’t seeing subscriber growth keeping up with rising content costs. Furthermore, if Netflix doesn’t bring these together, its domestic streaming business could become unprofitable, according to Briefing.com.

On Thursday, Comcast’s (NASDAQ:CMCSA) Disney (NYSE:DIS) distribution plan gave Netflix a competitive wake up call. The agreement gives Comcast the right to live stream Disney’s programming to its cable subscribers over the Web anywhere, making it a direct rival to Netflix and others who don’t want cable for their TV entertainment.

Time Warner (NYSE:TWX) also threw a wrench in Netflix’s world on Thursday. In a attempt to increase DVD sales, the company pushed Netflix, Redbox (NASDAQ:CSTR), and Blockbuster (NASDAQ:DISH) into doubling their wait time from 28 days to 56 to offer new DVD releases from their rental services.

By doing this, Time Warner will continue to allow the companies to purchase DVDs from them at wholesale prices. Netflix ended the week on Friday with a rising stock price, making it the best performing S&P 500 stock. There was no news for the surge. It closed at $86.29, up 8.81 percent.

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