Netflix rises on subscriber price hike, just like last time
On July 12, 2011, Netflix (NFLX) announced that it was splitting its DVD-by-mail and streaming video services into separate plans, raising prices by as much as 60% for subscribers who wanted to continue getting both services. That day Netflix stock rose 0.2%. The next day it hit a then record high of 304.79 and ended the day up 2.6%. At the time, there was a disconnect between how Wall Street and Main Street perceived the price change, as IBD reported in the article “Netflix Investors Like Rate Plan Changes, Ignore Subscriber Gripes.” But when it became apparent that the price change would lead to subscriber cancellations and slower growth, investors sold off Netflix. Three days after the price change, Netflix stock fell 4% and began an epic slide. The company lost 83% of its value from its peak, bottoming out at 52.81 in August 2012. It eventually recovered,