Netflix Gets Wall Street's Silver Medal in 2013
As the year on Wall Street closes, Netflix can boast that red is the new black.
The company's stock surged 296 percent this past year, which, according to a review by The Wall Street Journal, made Netflix the second best performing U.S. stock. The only thing more popular in the equities market than binging on videos of House of Cards and Arrested Development was electric cars. The biggest winner from 2013 was Tesla, whose battery-powered cars have become a Hollywood favorite; the company's stock was up 346 percent.
Netflix's highs mark a turnaround from just two years ago when the company announced it was splitting its business into a streaming service and a DVD subscription service. The Qwikster plan was panned and sent the stock sagging under $100 a share amid concerns of skyrocketing costs and rapidly defecting customers. The company even faced lawsuits alleging it had misled investors.
Today, Netflix attracts more bulls than bears. The company's stock now trades above $300 a share. Things have gone so well that on Monday, Netflix announced it was terminating a stockholder rights plan -- adopted in late 2012 and designed to ward off hostile takeovers from the likes of Carl Icahn.
Netflix spends some $2.7 billion on content -- more than twice as much as Amazon -- which leads some investment analysts to continue to worry about costs. But the original series have proven popular, and the company has eked out a profit -- $32 million in earnings last quarter.
The coming year begins with a purge of sorts. The company's license on titles including Top Gun, Titanic, Being John Malkovich and Braveheart reportedly expires on New Year's Day. Netflix will be removing some videos from its digital library of about 20,000 titles. On the flip side, the company also has announced a $6.99 subscription plan for new customers willing to limit themselves to one standard-definition stream at a time. That's a dollar off its typical plan. Some analysts believe that fee increases for HD content on multiple screens is in the cards.
Tesla gets the gold medal on the WSJ's list. Netflix takes home the silver. And as for the bronze? That would be Best Buy, up 239 percent and demonstrating that the business of retailing electronics is healthy in Wall Street's eyes. Best Buy finished well ahead of Twitter, which premiered on the New York Stock Exchange in early November and is up 145 percent since its IPO. Not bad, but not Netflix.