This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Top 15 Business News Stories of 2011

Stocks in this article: TM DAL BAC AAPL NWSA BRK.B NFLX

Netflix Destroys Value
Reed Hastings, CEO of Netflix

Netflix's (NFLX) fall from grace has deemed the company and its management team, led by Reed Hastings, as one of the worst of 2011.

After running up nearly 70% in the first half of the year, the video-rental giant made several missteps that sent the stock free falling, ending the year down 59% -- and 75% off its July high or nearly $300.

The company's precipitous decline started with management's decision to raise prices on its most popular one DVD-by-mail and unlimited streaming package by 60%. The increase was spurned by subscribers, who criticized the company for the way it approached raising prices.

To make matters worse, shortly after the price hike, Netflix revealed that it was unable to reach an agreement with Liberty Starz to renew its streaming content deals. That means Starz movies and television shows will be pulled from the service come February. This escalated consumer ire, with subscribers complaining that they didn't want to pay more for less content.

In the throes of customer and Wall Street dissatisfaction and grasping at straws, Netflix made a surprise announcement in September that it planned to separate its DVD-by-mail and streaming services into two businesses. The streaming service would remain under the Netflix banner and the DVD segment would become a new business called "Qwikster."

Subscribers took to the message boards again, voicing concern that the separation of the two services would make it more complicated for users of both to organize and watch content.

Ultimately, Netflix reversed its decision, doing away with Qwikster but not before issuing a mea culpa to investors regarding the way it handled its new strategies.

But subscribers were not that forgiving, and the price hike and failed negotiations with Starz led to a loss of about 800,000 subscribers in the third quarter.

Netflix also announced an aggressive international growth story in 2011, launching a streaming service in Latin America and the Caribbean and laying groundwork for an entry into the U.K. and Ireland early next year.

Due to costs associated with overseas growth, Netflix warned that it expects to swing to a loss in 2012. It previously said that it expected to be unprofitable for several quarters next year before revising its outlook. Management has provided no indication about when it expects to return to profitability.

Netflix's obliterated stock price has led to chatter of a possible takeover in 2012 . Amazon (AMZN) and Verizon (VZ) have been pegged as possible acquirers, as both company's eye a market share in the streaming video space. -- Jeanine Poggi

11 of 16

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs