The fall of Netflix (NFLX Quote) stunned investors Friday, as the debate about the mail-order DVD rental firm's prospects only got louder.
Netflix shares slid 26% in the wake of Thursday's mixed second-quarter earnings report. While revenue rose 90% from a year ago, per-share profits fell short of Wall Street estimates. Grabbing the most attention was the company's prediction that it would spend more in coming quarters to expand its subscriber list.
Friday's Netflix selloff highlights the vigorous tug-of-war between the company's rabid fans and its voluble detractors. Even as Netflix lost a quarter of its value in heavy trading Friday, the stock still had risen fivefold in the space of two years. And while some people warned of growing competition from deep-pocketed giants like Blockbuster (BBI Quote), others predicted nimble Netflix would run circles around slower-footed rivals.
Netflix shares dropped $8.25 to $23.75 Friday.
Value Judgment
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