Troubled online DVD rental site Netflix continued its ongoing struggles with a massive stock drop in response to its latest quarterly statement, according to Bloomberg.
On Monday, October 24, Netflix's stock ended the day at nearly $120 per share, around where it has lingered since the big price drop in September that followed it announcing plans to split into separate streaming and rental companies. At the start of the day Tuesday, the company's stock opened at $74.90 per share, a decline of more than 35 percent.
With the latest drop, Netflix has now lost more than $10 billion in market value since its highest point this July.
In part the company's ongoing troubles represent the difficulties it has had in expanding its content library and geographical base, but Netflix has also been rocked by poor management in regard to pricing decisions, often seeming directionless.
"The new baseline of [subscriber] metrics is troubling, management credibility has crumbled, international adoption is weak (as we suspected), content costs are mounting, and it is clearer that the DVD business accounts for the vast majority of profits," Tony Wible, an analyst at Janney Capital Markets and longtime critic of Netflix, said in a research note, according to The Wall Street Journal.
The biggest news of the day, however, and the driving force behind Netflix's dramatic drop is the news that the company saw a veritable exodus of users through the last quarter. More than 800,000 customers canceled their subscriptions with the service in the wake of the turbulent pricing changes, the decision to split the company and then the decision to instead keep the company together.
Bloomberg notes that the company had already lost ground with its initially projected losses of around 600,000 users, in contrast with the expectations of market analysts, who on average correctly predicted the larger losses. The latest cancellations bring the company down to around 24 million, a loss of more than 3 percent of their user-base.
At the same time, growth abroad served to counter some of those losses, with the total number of users declining by only 300,000 people. That international growth could increase with the company's recent introduction in the U.K. and Ireland, according to Bloomberg, as well as plans to expand further into South America.