Netflix hits new high as cord cutting increases and investors abandon traditional media

Key Points
  • The stock hit an all-time high of $157.90, even as streaming rivals announced new services.
  • An increase in cord-cutting likely fueled the stock.
Reed Hastings, co-founder and CEO of Netflix.
Mike Blake | Reuters

Netflix stock hit an all-time high Thursday, even as companies like Twitter, Hulu and Facebook to announce plans to expand online video.

The stock hit $157.90, up about 1 percent, after consistently trading close to that level this week.

Netflix didn't have any new announcements, and though its beat expectations during its earnings report on April 17, it added fewer subscribers than expected. However, what may be pushing the stock up is the reports of growing numbers of cord cutters.

A report from MoffettNathanson on Wednesday said 762,000 customers quit their cable and satellite subscriptions during the first three months of 2017. Even if the number of people who went to a "skinny bundle" from a pay TV service like Dish's Sling TV were taken out, half a million people still cut the cord. Reports earlier in April from GfK showed 8 percent of the U.S. population no longer subscribe to pay TV services, while another 9 percent never subscribed at all.

Meanwhile, companies like Hulu and YouTube are offering live TV services that allow users to have access to network programming without a cable or satellite subscription.

"Hard to see a better derivative on cord cutting than Netflix," RBC analyst Mark Mahaney told CNBC via email.

In addition, poor stock performance from traditional media companies could signify that investors are moving their dollars to streaming services, Bernstein senior analyst Todd Juenger told CNBC. Viacom beat estimates on Thursday, but shares were down 6 percent. Meanwhile, Time Warner remained flat despite coming in higher than analysts' revenue and earnings per share estimates on its earnings report on Wednesday.

"One could argue that old media's demise and Netflix 's success are correlated," Jenger said via email.