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Netflix has a wee bit of room to be smug
Netflix is fluffing it’s feathers. The company co-founded by Reed Hastings snapped out of its subscriber losing streak, generating nearly $500 million in free cash flow after netting 2.4 million new subscribers in the third quarter. The reversal is a welcome change, and gives it a little bit of room to strut its stuff ahead of an impending price war.
The net additions blasted through its own low-ball forecast of 1 million, sending shares up more than 13% in after hours trading on Tuesday. Netflix took the winning moment to call out rivals. The company reckons its competitors have combined operating losses of well over $10 billion versus Netflix’s operating profit of approximately $5 billion year-to-date.
A plan to sell subscriptions at a lower $7 per month price point launches on Nov. 3. That is expected to boost subscribers to 228 million by the year end. With inflation raging and a saturated streaming market, others are likely to follow suit. That gives it but a tiny bit of time to be smug. Reuters