Why Netflix Could Fall Significantly This Year
It’s no secret that the media and entertainment industry is worth billions of dollars. Whether it’s TV shows or the latest blockbuster releases, the demand for entertainment is on a scale unlike anything we’ve ever seen before, and reaches right across the globe.
As a result, you’d think that companies such as Netflix (NFLX) would be riding the wave of this worldwide interest in entertainment, and becoming very profitable indeed. After all, the crucial aspect of Netflix and its competitors is the distribution of media – whether you want DVDs delivered to your door or 24-hour access to your favorite TV program, Netflix has it covered. Or does it?
Recent figures suggest that Netflix’s popularity and relevance to today’s consumer may have peaked – and that it’s now on a downhill slope.
Currently, Netflix’s stock is trading at around $114. This is a pretty impressive amount, and seems reasonable when you compare it to its price this time last month (March 2012) which was $113. However, when we look back at Netflix’s stock history, we see that these figures are pretty dismal. In fact, this time last year, Netflix’s stock was trading at $242 – over double its current price.
The price of Netflix’s stock hasn’t been as low as $114 since 2008. With such a catastrophic fall in price, surely Netflix isn’t alone in its suffering. However, you’d be wrong. Companies such as Time Warner (TWX) has seen an increase from $36 to around $38 in the past year; TiVo (TIVO) has seen an increase over the same period from $9 to around $12. To continue reading, click here.