NFLX (Netflix) Stocks Loses Quarter of its Value
Netflix (NFLX) saw its stock lose a quarter of its value this month in the face of customer backlash after it split its service in two, raising prices on both. According to the Christian Science Monitor, Netflix CEO Reed Hastings admitted to the mess, saying “I messed up.”
Hastings was not apologizing for the decision itself, however, the newspaper noted. In a Sunday blog post, the CEO merely said he was sorry for the way the decision was communicated. Under the new plan, customers who were previously using both the streaming and the DVD-by-mail options have to pay a higher total price in two separate bills.
Netflix also announced that its DVD rental service will be operated by an independent venture called “Qwikster.” Qwikster will maintain a separate website requiring customers to have separate accounts, separate queues, separate recommendations, separate reviews and separate billing, as Digital Trends reported.
In the wake of the news, Netflix’s stock fell, losing a quarter of its value in the first week. The Christian Science Monitor blamed the backlash on the combination of the bad economy and the price hike.
The company estimated that about 1 million people will drop their subscriptions by the end of the current quarter, which occurs on September 30.