Netflix Inc (NASDAQ:NFLX) is the world's leading internet television network. Spread in over 190 countries, with over 93 million streaming members enjoying TV shows including original series, documentaries and feature films. When Netflix launched its streaming service in 2007, it became a pioneer in the internet delivery of TV shows and movies. Since then, this entertainment mogul has added increasing amounts of content and developed an ecosystem for internet-connected screens. This American entertainment company was founded by Reed Hastings and Marc Randolph on August 29, 1997, in Scotts Valley, California.
With its lineup of original content, Netflix has developed great brand recognition. The company’s success is reflected in its share price. In the last year, Netflix's stock price has surged almost 70%. Apparently, it is on a good path. In the previous year, Netflix sales grew by 30%. Proportionally, its international subscriber base grew by 25%. Every year, Netflix adds an increasing amount of subscribers, which is a testament to its global reach. However, despite all of its positive qualities, Netflix's stock NFLX, +1.53% stepped into correction territory this Monday before paring some losses.
From Friday's close to Monday, Netflix shares fell as much as 6%. From its record high on June 8 of $165.88, the stock fell down to $148.31, or 10.6%. Since then, the stock has recovered slightly to 2.9% at $153.38, or 7.5% below its record. On Wall Street, a correction is considered a decline of at least 10% to up to 20%. Declines of 20% or more are defined as bear markets. Netflix shares have gained 23.8% in the current year, while the S&P 500 index is up 8.4%.
Ari Glass, a hedge fund managing director, enjoys being a Netflix subscriber. However, that doesn’t mean that he considers Netflix as a potentially profitable investment. Even though the company has been growing aggressive and expanding its market, growing like few other companies are able to do, it still has some potential investment risks. Another troubling news for the company is the fact that its net additions fell by 36% domestically and 22% internationally. It seems like 2017 is a critical period for Netflix's business.
Netflix reported 47.8 million international subscribers in the first quarter of 2017, an addition of 3.53 million sequentially. For the second quarter, the company has forecast 50.49 million international subscribers. Due to the increase in subscribers, Ari Glass is forecasting that the revenue will increase to $14.86 billion in 2022. This year, Netflix is also planning to boost its movie business and release 30 original movies.