Netflix Hammered by Subscriber Exodus

Shares tumble as subscribers leave

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    NEWSLETTERS

    AP
    Netflix hit.

    "Exodus" is, of course, a famous movie. You can watch it if you subscribe to Netflix. Unfortunately, for the company and its investors, Exodus also describes the movement of its subscribers -- they're leaving, because the company is raising its rates. And taking billions of dollars of share value with them.

    To Netflix's (NFLX) credit, it (kind of) saw this happening. The company copped to the fact that price hikes are unpopular, and that the one taking effect September first would be no exception.  But if you're an investor that held stock through the whole thing, you've seen the value of your shares deteriorate after the announcement was made.

    This morning, Netflix made it official: It expects subscribers to flee -- it sees 24 million subscribers for the third quarter, instead of the 25 million it previously thought. Now, a million fewer subscribers at about $16 per is a significant chunk of change lost, but not nearly as much as what investors lost this morning -- as I write this, Netflix shares are down 30 dollars each. Overreaction? Maybe. Are you willing to buy in?

    One final note on this: TV host Glenn Beck is starting a new show, complete with subscribers.  He's doing well out of the gate, with GBTV (that's Glenn Beck TV) already pulling 'em in. Beck says, though, that his goal is to be "The Next Netflix." 

    We assume that he wants to hold onto his subscribers a little tighter, though.

    Scott can be found on Twitter: @scottbudman