Entertainment Stocks Slide After Wild Day
Even Netflix wasn't immune to sweeping declines across the U.S. stock market.
Netflix ended a roller coaster day for the U.S. stock market by closing down 6.8 percent, the third consecutive day that the media company's share has experienced sharp declines.
The declines show that Netflix, an investor darling that withstood much of the recent media stock declines, is not immune to global market forces. The entire stock market was hit Monday by a surge in selling due to an economic slowdown in China, rebounding slightly throughout the day. The Dow Jones Industrial Average, which dropped more than 1,000 points in the early morning, closed down 588 points, or about 3.6 percent, after a volatile day of trading. The Nasdaq Composite was down 3.8 percent and Standard & Poor's 500 index dropped 3.9 percent.
Netflix shares started the day down significantly but rebounded with the overall market until ultimately falling by $7.08 to close out the day at $96.88. The stock slump was further exacerbated by several consecutive days of declines in which shares fell 7.8 percent on Thursday and 7.6 percent on Friday. The company's shares have lost more than 22 percent of their value since last Monday, Aug. 17.
The drop occurred despite a deal announced early Monday between Netflix and SoftBank for the Japanese launch of its video streaming service.
Netflix had seemed to be immune to the wave of declines that hit media stocks in recent weeks. Disney started the downward spiral Aug. 4 when CEO Bob Iger reported that ESPN had seen some subscriber losses. The resulting sell off pushed down stock prices for Disney, Viacom, Fox, Comcast and CBS. But Netflix was finally hit late last week after Sanford C. Bernstein analysts downgraded Disney and Time Warner, prompting a new wave of media stock declines.
Other media stocks closed down Monday, with Disney shares dropping 3.5 percent to $95.36, CBS down 2.5 percent to $43.95 and Viacom off by 1.7 percent to $40.17.