Netflix (NASDAQ:NFLX) has decided not repeat its previous 52 week performance after the huge outpouring increase in its stocks in S&P 500. After the remarkable rise in company’s share by 300% in 2013 the Company has pretty much lagged behind since then. However this December seems to be changing the tide for the company even though the company’s portfolio businesses are going through some current changes.
The CEO of the company Reed Hastings is trying to balance the international expansion of the company, while facing the low subscription problem at home. He also intends to acquire the multibillion dollar pipeline for streaming service. Thus, December has proved to be a critical time for the company’s investors for the fourth quarter as until now the company has seen a sudden jump in its stock but the whole month is yet to pass.
The company usually makes huge gains at this time of the year because of the demand of its electronic products during the holiday season. This trend has tremendously helped the company to boost its profit capacity during these days. During the same quarter last year, the company improved its capacity by 14% over previous the year’s performance by having subscribed 2.3 million customers. Same was the situation for 2012; the company seems to be booming during this time period every year. This year, sales have also indicated the strong and rising demand for tablets, smart phones, TVs and video games consoles. However this December, the same trend can also prove critical for the company because of its recent pricing policy. The company has recently increased its prices on various products and also includes lesser streaming subscribers than those of the previous year.
The company has also adopted the price cutting strategy very recently but it won’t do it much good as it would take money away from company’s World wide global expansion program. However with this month’s latest release of Marco Polo, the Netflix (NASDAQ:NFLX) intends to increase its goodwill value by providing state of the art services with quality content like Marco Polo itself. The company seems to be testing the global contents by employing this new strategy. It recently made deals with HBO by paying $90 million for 10 episodes of game of thrones. While the company has already secured Universal exclusive rights to the show Marco Polo given its huge ratings, the experts expect Marco Polo and game of thrones to give a big bump to the company’s earnings this year.
The December’s earnings cannot declare the management to be right or wrong; however they will give the investors an idea the company’s current financial position. The business analysts are currently focused on company’s pricing strategy especially after it hurt the subscriber growth rate. Hastings, while answering on the pricing issue gave the statement that the company is currently analyzing and adjusting its current moves and future plans and will only be able to give an official statement on company’s performance after the release of latest services.