According to Variety, the company’s stocks dropped as much as 7 percent marking their lowest rates in nine months.
According to CEO Reed Hastings, the drop in their stocks is due to the emerging competitors. Speaking at the Royal Television Society conference in Cambridge, Hastings acknowledged the coming issues they will be facing.
“While we’ve been competing with many people in the last decade, it’s a whole new world starting in November… between Apple launching and Disney launching, and of course Amazon’s ramping up.”
Hastings also cited NBCUniversal’s streaming service as another cause with their debut set for April 2020.
“It’ll be tough competition,” Hastings said. “Direct-to-consumer [customers] will have a lot of choice.”
His comments were enough for the company’s investors to feel weary of where the streaming service is headed as their stock closed down 5.5% for the day, to $270.75 per share. This is despite Netflix previously warning investors of a potential drop on their end as competition ramps up.
The streaming giant’s stock drop also comes after Bernstein media analyst Todd Juenger said their shares could drop 20 percent based on investor perceptions that Disney Plus and Apple TV Plus would steal shares in the market. Their lower price models caused the prediction, but he predicted stocks would rebound to a $450-per-share 12-month price target.
“We do not believe the launch of additional SVOD services will cause existing Netflix subs to cancel, or future Netflix subs to not materialize,” Juenger wrote. He argued the newly coming streaming services will not be competing “for a fixed number of potential subscribers.”
Netflix is scheduled to report their third-quarter earnings for 2019 on October 16 after markets close.
What do you think of Netflix stocks dropping as streaming service competition ramps up? Let us know your thoughts in the comments below.