Netflix (NFLX) Stock: The Great Debate

Netflix, Inc. (NASDAQ: NFLX) is having an overwhelmingly rough day in the market today as the great debate surrounding the future of the streaming content king’s business continues. At the moment, there’s a fierce debate between the bulls and the bears, and both sides have a very valid argument. Today, we’ll talk about what the bears think is going to happen, what the bulls think is going to happen, and what we’ll be watching for with regard to NFLX ahead.

The Bears Are Sinking Their Teeth Into NFLX

As mentioned above, Netflix is having a rough day in the market today as the bears start to sink their teeth into the stock. So, what’s happening? Well, the truth is that the bearish argument is a multi-part one, and a good one at that.

First and foremost, the bears point to the relationship between Netflix and Walt Disney. Under an agreement, NFLX had the rights to stream Disney content to their subscribers. However, more recently, Walt Disney announced that it would be pulling all of its content from Netflix. Considering that the Disney content was a strong sales driver for the company, this proved to be a big hit, as one of the most important content providers moved away from the service.

However, Disney didn’t just say that it was leaving NFLX. That would be bad enough. However, the hard-hitting news hit even harder. When Disney announced that it would be pulling its content, the company also announced that it would soon be providing its own streaming service. Unfortunately for NFLX, Disney said that this streaming service would come with a price that is substantially lower than that provided by Netflix. Considering the growing prices we’ve seen from the company recently, competition may become a bigger issue than expected with substantially lower prices to compete with.

Finally, the bears point to the potentially increasing cost for the streaming industry. Recently, the Federal Communications Commission has been talking about rolling back net neutrality regulations. If these regulations are taken off of the book, companies like NFLX could face substantially higher fees for top-tier streaming speeds, leading to even more pain for the company ahead.

The Bullish Argument

While it’s clear that the bears have a very valid argument here, they are not the only group whose argument holds validity. The reality is that the bulls have a pretty valid argument too. Sure, they aren’t happy about the Disney news or the potential cost increases surrounding the roll back of net neutrality regulations, but they still argue that NFLX will remain as the streaming content king.

At the end of the day, the bulls argue that when a company is the innovative force in an industry, they stay one step ahead. Ultimately, Netflix has done an incredible job with branding and┬ábecoming a household name across the United States and other nations. Considering this, when a consumer thinks about purchasing a streaming content service, chances are that NFLX is going to be one of the first that comes to mind. As a result, the company’s incredible brand and ongoing innovation will continue to drive growth.

What We’re Seeing From NFLX Today

Regardless of what the bulls have to say, it’s clear that the bears have their claws deep in Netflix stock today. Unfortunately, the stock is taking a bit of a dive. Of course, our partners at Trade Ideas were the first to alert us to the movement. At the moment (11:29), NFLX is trading at $188.59 per share after a loss of $10.59 per share (5.32%) thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on NFLX. In particular, we’re interested in following the company to see how sales go considering recent price increases, the loss of Disney, and mounting competition. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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