Updated with news of Netflix's expansion to the U.K. and Ireland
Not-so-fondly dubbed "Greed Hastings," investors and consumers alike are calling for the CEO's head after several strategic blunders in recent weeks. There are Facebook pages shouting for Hastings to step down and even an "Saturday Night Live" skit poking fun at Netflix's flip-flops.
|Netflix CEO Reed Hastings|
Netflix's 60% price hike went into effect in September for its popular one DVD-by-mail and unlimited streaming package, and Liberty Starz ended talks to renew its streaming contract, meaning its popular content will be pulled from Netflix next February.As a result, Netflix lowered its domestic subscriber forecast for the third quarter, predicting 24 million subscribers, down from its prior outlook of 25 million. Hastings apologized for the price increase earlier in the month, but amid his mea culpa more bad news was hidden. Hastings announced the company would split up its DVD-by-mail and streaming services into two separate businesses, with the DVD segment called "Qwikster" and the streaming division continuing to live under the Netflix banner. Hastings quickly back-peddled on this plan after subscribers were up in arms over having to separate their movie queues and have two different accounts for DVDs and streaming video. Yes, Hastings and crew haven't made the best decisions in recent weeks, seeming at times a bit desperate. But it could be too soon to demand his resignation. "We can't judge him in the short-term," said Sterne Agee analyst Arvind Bhatia. "The jury is still out." While Bhatia said some of Netflix's recent moves were done in haste, he "applauds the guts and vision." Bhatia said we can't make a fair assessment of Hastings' leadership in the next six months, but Hastings will need to prove himself in 12 to 24 months, with the key metric being the attrition rate. Read on for three reasons why Hastings deserves a second chance.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV