Despite Subscriber Growth, Netflix Shares Drop2 Jul, 2004 By: Holly J. Wagner
Capping a bad stock market week for publicly held rentailers, Netflix shares lost 10 percent July 2 after the company reported subscriber growth of 82 percent from the same quarter last year.
Netflix, ended the second quarter with 2,093,000 subscribers including 69,000 free trials. Although that was in the high end of the company's guidance range of 1,935,000 to 2,140,000 for the quarter, the market punished Netflix with a $3.30 decline in its stock price.
The growth is up from 1,147,000 total subscribers at the end of the second quarter of 2003 and 8 percent sequentially from 1,932,000 total subscribers at the end of the first quarter of 2004.
A down day marketwide, July 2 brought no relief for two brick-and-mortar chains downgraded a day earlier.
Shares of two of the three leading video rental chains lost steam July 1 after analysts downgraded their stocks.
Movie Gallery slid 72 cents a share, or 3.71 percent, from $19.55 to $18.81 after analysts at Thomas Weisel downgraded the stock from ‘outperform' to ‘peer perform' and Southwest Securities downgraded from a ‘strong buy' to a ‘neutral rating.'
Blockbuster slipped 24 cents, or 1.58 percent, from $15.18 to $14.94, after analysts at Thomas Weisel downgraded the stock from ‘outperform' to ‘peer perform.'