Shares of Netflix continued to slide a day after the company was widely criticized for deciding to split itself into two services.
In morning trading today, Netflix shares were down $12, or 8 percent, at $131. Shares closed today down $13.7, or 9.5 percent, at $130. The stock was setting a new 52-week low seemingly with each tick of the clock. Still, as a percentage, this is nowhere near the plunge the company saw the day after it announced it had erred in predicting how many subscribers would drop the service as a result of doing away with a hybrid subscription plan.
In July, Netflix alienated many customers by announcing it would soon start charging $8 per month to access movies and TV shows via streaming and an additional $8 to acquire DVDs. Netflix previously charged $10 for both discs and streaming. The company said last week that it now expects 1 million fewer U.S. subscribers in the third quarter than anticipated in July.
The day after that news hit, Netflix's shares went into a swoon, dropping $39, or 18 percent, to $169.25. This is a stock that soared past $300 as late as two months ago. The immediate future looks just as bleak as numerous Wall Street analysts slammed the move by CEO Reed Hastings to split up the company's services.
On Sunday evening, Hastings offered an apology in a letter to customers for the way the company announced the separating of the streaming and DVD subscriber plans. He also said Netflix would split itself into two separate services. The new Netflix will be involved in streaming video over the Web exclusively, while the other service, called Qwikster, will oversee DVDs by mail.
Subscribers, pundits, and financial analysts have ridiculed the plan on nearly every level. Some say that dividing the company will create confusion and hassle. Some say that Netflix risks losing customer faith and even some don't even like the name of the new DVD service.
"The name is less than optimal," wrote Barton Crockett, an analyst with Lazard Capital Markets, who doesn't think the name will resonate with consumers. To Crockett, Qwikster sounds less like a DVD service and more "like an energy bar or handi-vac."
Hastings said in his note to customers Sunday evening that he believes moving DVD-my-mail operations will allow the streaming service to grow unencumbered.
Updated at 3:17 p.m. PT with Netflix's closing share price.