Here's What Sent Netflix Stock Soaring on Thursday
All eyes were on subscriber growth when Netflix (NASDAQ: NFLX) reported its fourth-quarter results earlier this week, and while the company delivered 1.3 million more subscribers than expected, the stock price still slumped nearly 4% on the results.
The culprit? Netflix U.S. subscriber totals came in lighter than forecast. The company added about 420,000 domestic subs, missing the 600,000 it was hoping for. When Netflix provided its guidance last quarter, management said it expected "modest headwinds to our near-term growth, which we have tried to factor into our guidance." The uncertainty was caused by the debut of new streaming services from Disney and Apple. The lower subscriber numbers seemed to confirm investors' worst fears.
Netflix stock soared more than 7% on Thursday, gaining back all it lost and more, on a positive analyst note and news that the cable industry is hemorrhaging subscribers faster than expected. Let's take a closer look at why these two announcements are great news for Netflix.
Source Fool.com