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Netflix stock dips after 'Arrested Development' receives mixed reviews

After the months upon months of excitement and impatience surrounding the release of 15 new episodes of cult hit Arrested Development, a lot of the fizz has started to die off and what is left is a mixture of elation and disappointment for Netflix.

The highly anticipated new episodes of Arrested Development were released on Sunday morning, and on Tuesday Netflix’s stick fell but more than 6 percent. Shares for Netflix dropped $14.55 to close at $214.19, making the drop the largest for the company in nearly six months. So why the dip in stock when the network should be more popular than ever?

With a show that became a viral sensation when it was announced it would return there is always going to be those who loved it and those who hated it. However, many critics have been bashing the newest Arrested Development episodes, and this negative talk may have had an effect on Netflix’s worth in the stock market. The New York Times proclaimed that Netflix had “killed” the series, and Variety said that it was “an interesting idea that was more exciting on paper.”

With the momentous build up leading to the premiere of Arrested Development, Netflix’s stock was able to recover from a backlash to their increase in prices and proposed service changes from nearly two years ago. This resulted in investors paying out $144 for every $1 in Netflix’s project earnings (compared to $23 for every $1 for Google). What this means is that Netflix became a very high-stakes game, and the slightest stumble can cause investors to panic and dump their shares. This is what happened when they were faced with some less than positive reviews.

This dip in numbers is likely only a slight blip on the radar screen in the big picture for Netflix. IDC analyst Greg Ireland says that it is too early to know whether or not Netflix’s new strategy will pull in, or dump out, money for the company. Netflix has thus far denied commenting on how many of their subscribers tuned in to all 15 episodes of the show. 

- Arrested Development
- Netflix

Written by: harrisr
May 29th, 2013, 6:42 pm

Images courtesy of Netflix


Level 1 (53%)
Since: 18/Apr/08
Message Posted On Jun 18th, 2013, 5:01 am

Unfortunately for the ratings, the new season of AD is one I only watch with on special occasions - quite simply shows that are too good for me to want to catch up too quickly. So the fact that I've only watched four episodes so far is a good thing. That doesn't translate through to Netflix, unfortunately.


Level 1 (26%)
Since: 28/Oct/12
Message Posted On May 30th, 2013, 2:29 pm

The only real mistake was making character specific episodes.  If they hadn't done that, it would have been perfection.


Level 2 (82%)
Since: 12/Oct/07
Message Posted On May 30th, 2013, 12:38 am

I don't care about dips... I loved it and am pleased as punch to have it back, like a long lost friend.

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