Netflix’s share price has been battered this morning, as US stocks continued to struggle.
Shares in the online video-streaming company opened around 23 per cent down - and are showing no signs of recovery in early morning trading.
The plunge in shares is salt in the wound for Netflix, who recorded disappointing third quarter profit growth and a slowdown in subscription sign-ups.
Furthermore, satellite and cable network HBO revealed it was ready to take on Netflix by launching its own stand-alone over-the-top streaming service. Netflix’s wariness of the strength of the cable giant was revealed last year when Netflix chief content officer Ted Sarandos said “the goal is to become HBO faster than HBO can become us.”
For the three months ended 30 September, Netflix added 3m customers worldwide, below its 3.7m estimation. The company blamed the subscriber drop off on a $1 price increase introduced earlier this year.
A statement said: “The primary cause is the slightly higher prices we now have compared to a year ago. Slightly higher prices result in slightly less growth.”
Third quarter revenue rose 28 per cent to $1.41bn while profit rose to $59.3m, up from $31.8m during the same period last year. Netflix said it expects profits of $27m in the next quarter - almost half the $48m it reported for the same quarter last year.
Netflix’s struggles on the market today played out in the wider context of yet another bad day in the US stock markets.
The Dow Jones Industrial Average Index is down 0.16 per cent, the S&P 500 Index is down 0.65 per cent, the New York Stock Exchange fell 0.71 per cent and the Nasdaq Composite Index is 0.83 per cent down per index time.
Yesterday the Dow dived over 400 points while the S&P 500 fell into negative territory for the year. The US 10-year bond yield fell below two per cent for the first time since 2013 yesterday, but appears to have settled today.