Summary Box: Netflix shares tank

AP News
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Posted: Oct 25, 2011 3:31 PM
Summary Box: Netflix shares tank

NOSEDIVE: Netflix shares plunged 35 percent Tuesday after the one-time Wall Street favorite revealed a massive departure of subscribers angered by price increases and other changes at the online movie rental company.

DEFECTIONS: The company said Monday that it ended September with 23.8 million U.S. subscribers. That's down about 800,000 from June. In September, Netflix predicted it would lose about 600,000 U.S. customers. Its third-quarter financial results were stronger than expected but that seemed to be no consolation for investors.

DOWNGRADE: The results prompted a downgrade to "Neutral" from "Buy" from Citi Investment Research analyst Mark Mahaney. He also slashed his target price on the stock to $95 from $220.