Is Netflix Stock a Buy After Its Deal With Microsoft?

In 2007, Netflix (NASDAQ: NFLX) upended the entertainment industry when it launched the first streaming service, challenging traditional paid television with a less costly and more convenient alternative. Early on (and somewhat ironically), many industry executives failed to see Netflix as a threat, including the CEO of the now-defunct video rental chain Blockbuster.

Everyone knows what happened next. Broadcast and cable television have slowly lost market share, while Netflix has become a global phenomenon. At the same time, patient shareholders saw life-changing returns as Netflix stock skyrocketed more than 4,600% over the past 15 years.

However, Netflix lost 200,000 subscribers on a sequential basis in the first quarter -- its first subscriber loss in more than a decade -- and the company expects to lose another 2 million in the second quarter. Investors are worried Netflix has hit a saturation point, and those concerns have sent the share price tumbling. Despite tremendous returns over the last one-and-a-half decades, Netflix stock is still down 75% from its high. But the company just made a potentially game-changing deal with Microsoft (NASDAQ: MSFT).

Source Fool.com