Again, investors are trading on emotions as Netflix Inc. seems to be on a freefall since it announced its 2nd Quarter results and gave some not so great outlook for the next couple quarters.
The company is mainly loosing the previously strong new members addition which can be explained by its bigger size and the competition in that market; but is still increasing its total number of subscription.
The 2nd main issue is the high amount of expenses recorded which may have been caused by the continuous global expansion which should decrease as it gains presence in most key countries.
Taken in this context, a year from now the company should start recording much better earnings.
But for now, isn’t it a bit overdone for the stock to trade below $70 from above $250 a year ago?
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