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This FANG stock goes negative for the year, giving up a 46% gain

This FANG stock goes negative for the year, giving up a 46% gain

Posted On September 24, 2019 1:30 pm
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What a difference the past two months made for Netflix.

It was just early July when the streaming video giant’s stock was flirting with new record highs. Now after an unexpected loss of subscribers and increased competition in the streaming war, shares of Netflix erased all of its 46% gain for the year at its peak and officially entered negative territory on Monday.

Netflix has been haunted by nonstop bad news in the past few months. First, its most popular show “The Office” was stripped from its platform by NBC. Then, Netflix was hit by a rare loss in U.S. subscribers and a large miss on international subscriber adds in the second quarter, which sent the stock plunging and suffering its longest losing streak in five years.

A slew of announcements from media companies launching their own streaming services — AppleDisneyAT&T’s WarnerMedia, NBC — came as a last straw for the struggling stock.

Some Wall Street analysts started losing faith in their darling stock. Barclays analyst Kannan Venkateshwar said Monday Netflix is “very expensive” under a new valuation framework for growth companies as Netflix needs millions more subscribers than it can get.

Most of Netflix’s gains for 2019 came from a big pop in January when the company flexed its pricing power. It raised prices by 13% to 18% then and the stock soared. In a more crowded streaming space today, hiking prices may not be so welcomed by investors again.

Nomura Instinet analyst Mark Kelly told CNBC that increased competition could “take away engagement,” “make content more expensive,” “or diminish the price power Netflix has exhibited for several years.”

The newcomers are already winning in terms of pricing. Apple announced its original TV service will cost…

Continue reading at CNBC.com

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