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This is the end…
Netflix stock got creamed on Tuesday, falling by more than 12% for the day.
That large of a drop certainly grabs eyeballs, but based on the company’s track record it may not be a big deal according to research from Bespoke Investment Group.
“Notably, NFLX has averaged a move of +/-13.8% on its earnings reaction days throughout its history as a public company, so today’s 11% decline is actually less volatile than normal,” said a report from Bespoke.
“Using our Interactive Earnings Report Database, we pulled all earnings reaction day drops of 5%+ for NFLX. Since 2002 when NFLX went public, the stock has experienced 5%+ drops following earnings 24 times!”
In fact, according to Bespoke, the company is the most violent mover of any S&P 500 company the day after earnings and this even the worst drop, Netflix crashed over 20% after its Q3 2014 earnings.
Now of course, it could be different this time. Subscriber growth came in as expected, but guidance was much lower than estimates. Plus, the increased competition from companies like Amazon and Hulu could make the landscape totally different.
On the other hand, the company is pivoting towards original content and its customers are the most loyal of any streaming service.
So the future of the company may seem unprecedented, but today’s stock drop certainly isn’t.
SEE ALSO: Netflix tanks after giving a terrible second-quarter forecast
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Can cell phones give someone cancer? While the scientific community remains in debate over the subject matter, a new study from the University of Sydney School of Public Health says no. While brain cancer rate have gone up in men over 70, that’s likely due to a different technological reason.
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Let's go invent tomorrow instead of worrying about what happened yesterday. - Steve Jobs
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