Netflix Stock Drops Into the Negative for the Year

Netflix has seen quite a reversal of fortunes this year. Earlier in 2019, the streaming giant was looking at some of its highest heights in terms of record stock market highs, but it's all come tumbling down. In July, Netflix announced that it lost subscribers for the first time causing Netflix to lose upwards of $17 billion in market value when its stock dropped over 10 points a share. Now, just two months later the 46% gain Netflix had made for the year is gone. According to CNBC, Netflix is officially in negative territory as of Monday.

This development for Netflix wasn't predicated by major news for the streaming giant unlike July's loss. Instead, it's largely the product of a series of bad news events for the service. In June it was announced that The Office, Netflix's most popular show, would be departing the platform with NBC moving the Greg Daniels-created property to Peacock in 2021. Then there was the announcement about the first-ever subscriber loss in July. Both of those factors are joined by an onslaught of announcements of new streaming services from Disney (Disney+), Apple (Apple TV+), WarnerMedia (HBO Max), and NBC (Peacock) as real competition to the Netflix. It's a perfect storm of sorts.

It's something that Netflix CEO Reed Hastings touched on when speaking to Variety recently, comments that at that time prompted a 5.5% stock slide for the company on Friday.

"While we've been competing with many people in the last decade, it's a whole new world starting in November...between Apple launching and Disney launching, and of course Amazon's ramping up," Hastings said. "It'll be touch competition. Direct-to-consumer [customers] will have a lot of choice."

That customer choice is something that is likely going to only get more challenging for Netflix going forward. Disney+ in particular is going to be a major threat for Netflix. Disney's new streaming service launches in November and will feature not only all of Disney's animated and live-action film content but will also feature content from Disney Channel and original series like High School Musical. Add in the Star Wars content and all of the Marvel content you've got a very appealing service for fans, one that is less expensive than Netflix, too.

On top of the competitive threat from upcoming streaming services, there's also something to be said for how Netflix is stacking up with current competition as well. At last night's Emmy Awards, Netflix brought home relatively few awards as compared to Amazon and HBO -- Netflix brought home four compared to Amazon's seven and HBO's nine. There's also been a bit of a shift in how consumers view Netflix, with the show's reputation for abrupt, early cancellation of series something that is a frequent trending topic on social media.

Of course, even with all of these factors, it doesn't appear that analysts are quite ready to give up on Netflix. According to CNBC, of the 390 analysts who cover Netflix stock, 28 have given the stock a buy rating and nine suggest holding the stock. Only two have sell ratings.


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