Netflix Lowers Price, Stock Plummets

I’m sure Netflix now knows the answer to the classic phrase: What a difference a dollar makes! Easy, 12% of your stock price and a 52 week low.
With Netflix lowering the price of its two of its most popular subscription plans by $1 (The $9.99 to $8.99 and $17.99 to $16.99) investors reacted quickly today by hammering the stock with a massive sell off.
“The Netflix story is all about subscriber growth,” says Pachter. “The wording of this, the timing and the actual act of cutting price suggests they lost subs in the second quarter, which means people are going to realize that they aren’t going to grow anymore.”
Netflix had 6.8 million subscribers as of the end of March, and it said in its news release on Sunday that its new pricing will benefit its “more than six million members.” Pachter says that language suggests the company hasn’t gotten any closer to 7 million subscribers, and it may be losing ground — a prospect that would disappoint Wall Street.
This puts Blockbuster in prime position to begin a bloody price war, with the granddaddy of mail order movie rentals.
