Netflix credit rating downgraded to account for lost subscriptions
Wednesday, November 30, 2011
Standard and Poor's has downgraded the credit rating for Netflix Inc. from "BB" to "BB-" in order to indicate the losses anticipated for the company's video subscription service.
The Associated Press reports Standard and Poor's analysts came to the conclusion that Netflix's international expansion is expected to cost more than originally anticipated, while the company still suffers the lingering effects of its price increase for the subscription service in the U.S.
Despite the downgrade, Netflix's stock recently received a boost after analysts said the worst could be over after the company angered its customers by planning to increase prices by up to 60 percent in the U.S. As a result, Netflix has reportedly lost more than three-fourths of its market value, according to the news source.
During the recent Credit Suisse technology conference, Netflix CFO David Wells admitted the company has learned "painful lessons" from the hit its stock has taken since the plan to increase prices was rolled out, Barron's reported.
On Tuesday, November 29, Netflic shares ended down 3.4 percent, according to the news source.
Monitoring stock reports and credit ratings can benefit those who engage in online stock trading.
Sign-up for the eOption Daily Market Report
eOption’s Daily Market Report is a timely and informative service detailing equities that have recently met classic chart pattern conditions for bullish and bearish equities. To receive the eOption Daily Market Report, you must be a current client and have a current email address on file. Please contact email@example.com or login to your account and enroll for electronic statements or confirms. More Information