Netflix, Inc. (NASDAQ:NFLX) has great content. Just today, it provided live coverage of a Prince and Pauper drama. By the end of the show all the billionaire princes in the form of Carl Icahn, Philippe Laffont and Andreas Halvorsen had lost more than $500 million. This is the story of Netflix, Inc. (NASDAQ:NFLX)’s stock in the after trading hours which was down a staggering 27% at one point. CNBC‘s Julia Boorstein revealed the not so obvious secret of this disaster.
The reason why I said ‘not so obvious’ is because in the earnings report which caused all this chaos, Netflix, Inc. (NASDAQ:NFLX) beat the earnings forecast and revenues were in line with the expectations. However, the suave investors trading in after hours knew the right numbers to look at and none of the above mentioned figure was able to capture their attention.
“[…] With Netflix, Inc. (NASDAQ:NFLX), the focus is always on the subscriber numbers and the subscriber net additions, both in the U.S. and internationally are both coming in light. Net additions in U.S coming in about 400,000 lighter than expected, and lighter than Netflix forecast. International streaming subscribers coming in about 300,000 subscribers lighter than expected […],” reported Boorstin.
That is still not the end of the story, and Netflix, Inc. (NASDAQ:NFLX) had yet another bombshell to drop. Boorstein mentioned that forecast for the fourth quarter in terms of subscriber number additions will also have to be revised as the higher prices that the streaming service initiated in the second quarter are having more adverse effect than the company anticipated.
Stocks are already battered and run over day in and day out by volatility on account of a bleak economic outlook from Europe. I wonder how much more beating could Netflix, Inc. (NASDAQ:NFLX) and its once proud owners, Carl Icahn, Philippe Laffont and Halvorsen can take. If they indeed decide to liquidate their positions in hopes of cutting their losses, Netflix is going to take another dive.
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