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Netflix stock drops after not meeting expectations

Netflix’s victories still fall short with investors

Netflix gained over five million subscribers last quarter, but that was still not enough to appease investors, who estimated they would gain closer to six million.

Even though Netflix continues to dominate the media market, investors are still not impressed; indeed, it seems as if the bar is just set too high for the media mogul. Netflix generated $3.9 billion in sales and $384 million in profit, yet their stock still dropped 13 percent on Monday.

Investors worry about competitors gaining ground on Netflix. Although the popular streaming service is the most popular platform for watching television and movies among consumers, investors still want more. With the AT&T-Warner merger and Disney’s anticipated acquisition of Fox, Netflix certainly has to worry about newfound rivals stepping into the ring.

Plus, Apple and Amazon continue to pour money into original content, which could gain traction against Netflix. The company attempted to alleviate investors’ concerns in their shareholder letter:

We believe that consumer appetite for great content is broad and that there is room for multiple parties to have attractive offerings. Our strategy is to simply keep improving, as we’ve been doing every year in the past.

5.2 million subscribers and $384 million in earnings are both incredible numbers. Most companies would be ecstatic about these figures, but because it’s Netflix, investors want more. The company is the media giant nowadays, and investors expect it to give nothing but spectacular results.

Featured image via Flickr/Matthew Keys

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