Netflix shares slide after downgrade from Stifel Nicolaus; analyst sees competition from Hulu
By APTuesday, June 15, 2010
Netflix dips after downgrade at Stifel Nicolaus
NEW YORK — Netflix Inc. shares stumbled Tuesday after a Stifel Nicolaus analyst downgraded the stock, citing potential competition from the Hulu.com website.
THE SPARK: Stifel Nicolaus analyst George Askew cut Netflix to “Hold” from “Buy” in a note to clients.
THE BIG PICTURE: Netflix’s movie subscription service has continued to attract droves of new customers. It’s profit was up 44 percent in the first quarter.
THE ANALYSIS: But Askew sees a rising competitor in Hulu, the online video site co-owned by News Corp., Walt Disney Co. and General Electric Co.’s NBC Universal.
He expects the site to launch a subscription service soon that will cost about $9.95 per month and provide a bigger selection of movies and TV shows than what is available on the site’s free service.
SHARE ACTION: Netflix shares fell $3.18, or 2.5 percent, to $123.63 in afternoon trading.
