In 2010 Netflix CEO Reed Hastings was named Fortune Magazine's Business Person of the Year. How quickly things change.
After a year riddled with missteps and misfortunes, Hastings has quickly fallen from grace with not only his customers, but his shareholders as well.
Netflix stock price dropped nearly 30% on Monday, falling below $100 per share for the first time in 14 months. In mid-day trading Tuesday the stock is down yet another 35% to $77.55. And that means, in the last five months the stock has lost more than 60% of its value.
Here's why: Netflix announced Monday that it lost a shocking 800,000 customers last quarter after a couple of bungles in September. First, Hastings said the company was raising prices nearly 60%. Then a few days later he announced the company would split its DVD business from its streaming business.
But the story doesn't end there. After days of outrage and criticism from all corners, including the media, Hastings backpedaled, apologized and said the company would remain as one. However, the price increases remain in place.
"We became a symbol of the evil, greedy corporation," Hastings said Monday. "Then we faced a reputational hit that created significantly more cancellations than we anticipated."
In the accompany video, The Daily Ticker's Henry Blodget says its an absolutely "spectacular collapse", one like he has never seen before. He explains why the company has fallen on such hard times.
For more on the saga see:
- Reed Hastings