This week was a roller coaster for Netflix shares. There was a ton of news about the competitive threat that we’ve discussed from Facebook and Warner Bros that drove down the Netflix stock price by more than 11% for the last month, outpacing the Nasdaq by a factor of 4x! This is all happening because of rumors that Time Warner will start rending movies through Netflix and comments from Goldman Sachs investment analysts that the Facebook deal with Warner Bros. will hurt them long term. Netflix revenue and net income, however, look to be holding up well.
Netflix is still very strong from a traffic generation perspective–the company generated over 30 million unique views in the last month, which exceeds the number of customers they have by 10 million. This means their marketing is likely sending a ton of traffic.