The former whipping boy for the tech industry is on the comeback trail.
Netflix, whose stock has dropped as low as $52.81 over the past year after almost hitting $300 in mid-2011, rose more than 40% since Wednesday's market close. The impetus appears to be a better-than-expected fourth-quarter earnings report in which the company announced that it added 2 million domestic streaming subscribers — more than had previously been anticipated — and posted a surprise profit.
Many investors lost confidence in the company in 2011 when it uncoupled DVDs and streaming subscriptions and began charging $16 a month for streaming plus DVDs, nearly twice the original price. The company then frustrated and confused customers further with a plan to rename its DVD service Qwikster and have it run as a separate operation. Netflix abandoned the plan a month later and CEO Reed Hastings apologized.
Some 18 months later, in a letter to shareholders Hastings highlighted expanding international operations and more profits from streaming video. In fact, in the first quarter of 2013, Netflix expects to report for the first time that its streaming business is more profitable than its DVD business.
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