New media stocks struggled in July
July was not a good month for new-media stocks, writes Paul Bond at The Hollywood Reporter. The bunch of them declined 3.7%, and among the losers were everbody’s favorite online movie rental company, Netflix:
In many cases, the falling share prices encouraged more bullishness among Wall Street analysts. Netflix, for example, reported revenue that fell short of Jefferies & Co. analyst Youssef Squali’s predictions, and the stock quickly shed about 20%, “a level we find attractive,” the analyst wrote.
In a case of bad timing, just before Netflix’s earnings release and stock plunge, Lehman Bros. analysts upgraded shares to “overweight,” arguing that lower-priced subscription plans were leading to subscriber growth, as were store closures at bricks-and-mortar rivals.
But the day after Lehman slapped its $32 target on Netflix shares, they dropped from $23.76 to $18.78. They finished the month at $20.69.