Netflix was the best performing stock in the S&P 500. "Was" is the key word. Shares fell more than 6% yesterday as investors reacted to mix reviews of new "Arrested Development" episodes.
Netflix brought the cult series back to life after it was canceled from broadcast seven years ago. Back then, the show was barely watched but highly acclaimed. "Arrested Development" centers on a wealthy, eccentric family while their real estate developer father is in prison for defrauding investors. Produced by Ron Howard, the show was also known for its celebrity supporting cast (Liza Minelli! Henry Winkler! Charlize Theron!). It lasted only three seasons before the plug was pulled.
In the years the show was off the air, its popularity spread by word-of-mouth and a full catalog of shows easily accessible on streaming video services like Netflix. This was supposed to be a surefire hit.
It may have been a miss.
Reacting to critical disappointment and investor worries, Netflix CEO Reed Hastings appeared on CNBC earlier today, saying:
"Netflix is about being able to watch when you want. Not having to watch at a certain time like linear TV is. SO, we're really not focused on the Day-1 ratings. It's really over the first year."
In other words, appreciation for this new season of "Arrested Development" will probably take as long as it did the first time around. Maybe.
Or, "Maeby" not, worry fans and shareholders alike.
Should you cancel your shares of Netflix or is it a classic waiting to become an even bigger hit? We ask Steve Cortes, Founder of Veracruz TJM why he is shorting Netflix's stock and Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson why he's bullish.
Who's right? Watch Cortes and Ross square off in the accompanying video.