Sept 17 Netflix Inc (NFLX.O) shares fell 5
percent on Monday after Macquarie started covering the online
streaming video company with an "underperform" rating.
Macquarie research analyst Tim Nollen put a $50 price target
on the stock because media companies hold the upper hand. "In
keeping with our positive thesis on media names like Time Warner
and CBS, we believe content owners rule the roost; Netflix is a
price taker in an increasingly competitive market," he wrote in
Shares of Netflix fell $3.12 to $57.41.
The once-high flying Netflix stock, which at one point was
trading at around $300, has hit several hurdles over the past
year mainly over the cost of acquiring movies and TV series from
media companies as well as stiff competition.
Content producers such as Time Warner Inc (TWX.N) and CBS
Corp (CBS.N) are being courted by a slew of Netflix competitors
like Apple Inc (AAPL.O), Google Inc (GOOG.O) and Amazon
(AMZN.O), which are trying to lure people to their streaming
In the latest example, studio partnership Epix struck a
three year deal with Amazon. The news sent Netflix shares
plummeting. Epix, the pay TV channel with more than 15,000
titles owned by Viacom Inc's (VIAB.O) Paramount Pictures,
Metro-Goldwyn-Mayer Pictures and Lion's Gate Entertainment Corp
(LGF.N) struck an exclusive agreement with Netflix in 2010 that
ended in September. [ID:nL2E8K473V]
Nollen also cited weak subscriber growth, which is "trending
below guidance" and the high cost of international expansion as
reasons for the rating.
(Reporting By Jennifer Saba; Editing by Kenneth Barry)
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Keywords: NETFLIX HOTSTOCK/
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