Netflix shares seem to be heading in one direction, down. Currently, Netflix shares dropped by 4%, and that happens to be the most significant quarterly decline for this company. With stiff competition from other new entrants to the streaming niche including Walt Disney – it seems that Netflix woes are being compounded by slow subscriber growth and an economy that’s in the doldrums. To put it in perspective, Netflix shares have dropped by as much as 30% since June end, making this quarterly the worst performance to date.
Netflix has recently started showcasing top-end premium shows like ‘The Crown’ as well as ‘stranger things’ and this only seems to have added to their worries. With increasing costs and lower profits along with falling shares, the situation appears bleak. And if that was not enough, Disney is planning to launch Disney+, a streaming service on November 12th; a streaming service showcases the best of Disney movies and shows. And ever since the news hit the rounds, Disney shares have risen by nearly 14% since April 11th.
And the competition for the audience seems to be getting more intense with more streaming services to be launched soon from the likes of Amazon, Hulu among others as well. Given the current and expected competition, Pivotal research had recently slashed its prices for Netflix from $515 to $350. And seeing how Netflix is due to announce its third-quarter results in October; a stiff decline could well indicate losing consumer confidence in the company and its performance to date as well. Most analysts agree that a negative third quarterly report could make a situation even worse. And the only way to offset this would be sharp gains, but so far that seems to be elusive as far as Netflix is concerned.