Netflix Shares Got Crushed: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Netflix (Nasdaq: NFLX  ) continued their slide today, falling 13% so far in intraday trading.

So what: Momentum traders piling on and continued speculation about who's going to end up buying Hulu is putting pressure on shares today. The only real "significant" news is that Justin Bieber's movie, Never Say Never, will be available for streaming in Canada tomorrow.

Now what: I really hope that Justin Bieber doesn't have the kind of impact on the stock market to cause this move, so I'll point more to continued downward pressure on the stock. Shares have been beaten up for quite a while now, and even though I haven't been high on the stock in the past, the price is starting to turn my view. Shares now trade at just 17 times forward estimates, and rumors are swirling that Amazon.com (Nasdaq: AMZN  ) is interested in buying Netflix, which would provide a nice jolt if they come true.

Interested in more info on Netflix? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Motley Fool newsletter services have recommended buying shares of Amazon.com and Netflix. Motley Fool newsletter services have recommended creating a bear put spread position in Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (7)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 29, 2011, at 4:01 PM, GordonsGecko wrote:

    Stop that ridiculous talk. Amazon is NOT buying netflix. End of story.

  • Report this Comment On September 29, 2011, at 6:07 PM, beachdudeca wrote:

    Why keep spreading false rumors and fantasies. Amazon is not buying Netflix as a company, it might buy some aspect of the organization next summer if Netflix disolves. But Amazon would not buy Nextflix as a company since they would be paying twice for the same content and the content license is the only valuable asset Netflix currently has.

  • Report this Comment On September 29, 2011, at 7:31 PM, TruffelPig wrote:

    Amazon will destroy and crush netflix. The ultimate disruptor will be disrupted. Tech stocks fly as long as they fly. They all come down. Eventually.

  • Report this Comment On September 29, 2011, at 9:18 PM, lucasmonger wrote:

    The only rational explanation why Netflix decided to piss off their users, split into two entities, and not tie their subscriber's choices together is to be able to sell the individual pieces (video streaming and/or DVD delivery). Amazon buying Netflix would be a landmark deal. Maybe Redbox (Coinstar) or Blockbuster (Dish Network) would buy Qwikster.

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