Netflix Makes it Hard to Chill

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Netflix is making it hard to chill with the wild volatility the stock is currently experiencing. NFLX is still down sharply after getting crushed after releasing its Q2 Earnings.

EPS hare came in at .09 cents and revenue was in line at $2.1B, a 28% increase year over year.   Share prices were down over 13% despite the earnings beat.

The reason for the sharp decline was concerns regarding Netflix’s subscriber numbers; the company added 1.7 million new subscribers, the lowest growth in 2 years. Total subscriber base now sits at 83.2 million worldwide.

Netflix is slowly transitioning to more original content and away from licensed content, despite a new deal with Disney content that is expected to launch in September in the US only. The streaming service will add over 600 hours of new content in 2016.

“50/50 long term that is a probable mix, original content has proven to be an efficient investments” said Ted Sarandos, Netflix’s Chief Content Officer.

Netflix is also rolling out its international expansion strategy but taking their time in the process. The company is suggesting that it is a learning process to see what content resonates with each localized market.

“The whole advantage of going broad in January was to increase our learning and we will continue to roll out improvements,” said Netflix CEO and Co Founder Reed Hastings.

Netflix still has ambitious plans to reach 100 million subscribers and feels it is in reach with its international expansion.

Netflix shareholder Mark Cuban is not worried about the wild fluctuations the company is experiencing.  Cuban did say that Netflix should be more worried about a hostile takeover if its market cap stays under $40 Billion.  “I’m not worried about quarter to quarter fluctuations. They continue to dominate the content and consumer delivery market” said Cuban.

 

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