Netflix plummets on sale of stock, notes
Netflix stock’s free fall accelerated Tuesday as the shares reached a 20-month low amid intensifying concerns about the video subscription service’s ability to overcome public relations problems and competitive pressures.
The latest in a wave of share sell-offs followed Netflix’s decision to raise $400 million from investors by issuing debt and selling 2.86 million shares of its slumping stock. That served as a reminder that Netflix hasn’t been bringing in as much money as management anticipated from a price increase that led to mass cancellations and damaged the company’s once-sterling brand.
Wedbush Securities analyst Michael Pachter, who had predicted Netflix’s crash when it was still a hot commodity, interpreted the fundraising as a sign of more trouble ahead. He lowered his price target for the company’s stock from $82.50 to $45.
They’ve made some decent moves recently like the revival of Arrested Development, but they still have quite a hill to climb.