Netflix Stocks Tumble Amidst Slow Growth Prediction

Share prices of popular movie streaming business Netflix dropped by as much as 10 percent after it warned that the recent price rise might result in slower subscription growth in the third quarter.

The company’s share price, which breached the $300 barrier earlier, was down by 10 percent in after hours trading to $281.53, The New York Times reports.

The low third quarter outlook comes as Netflix announced its second quarter financial results. The company reported revenue of $789 million, an increase of 52 percent from the last year. Netflix also reported a profit $68 million, up 55 percent from last year.

However, for the third quarter, the company reported that it expected revenues between $799.5 million to $828.5 million, which is lower than what Wall Street analysts had predicted.

Netflix angered its customers by spinning its DVD-by-mail service into $8 per month service. It was earlier available as a $2 add-on to its $8 per month online movie streaming service.

Netflix CEO Reed Hastings said that the new pricing will not take affect till the end of the third quarter. He also added that the company didn’t expect many people to cancel or downgrade their Netflix subscriptions.