Why disappointed Netflix investors are missing the point

Netflix Earnings Investor Reaction

Shares of Netflix predictably tanked earlier this week when the company posted disappointing subscriber growth numbers, since many investors had been looking at the company as tech’s next big growth engine. Fortune contributor Kevin Kelleher, however, makes the case that investors should take the much longer view of Netflix’s potential to upend the television industry and not the ups and downs of meeting subscriber growth projections.

“[Netflix CEO Reed] Hastings has never been shy about stating that Netflix is playing a long-term game,” Kelleher writes. “In a perverse way, that approach — as sensible as it is from a business perspective — has contributed to the speculation that has left Netflix’s stock one of the most volatile for a large-cap stock.”

Because of this, Kelleher thinks that anyone investing in Netflix should understand that they’re investing “in the future of TV.” By this standard, he says, “Netflix’s comeback is proceeding, for now, just fine.”

Source:
Fortune
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