”This is what the shorts were waiting for,” says Fast trader Guy Adami after hearing news that Starz will pull its movies and shows from Netflix’s video streaming service by next February after renewal talks failed.
Starz, in a statement on Thursday, said the decision was "a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content."
”It’s not going to end with Starz,” adds trader Stephen Weiss. “Other providers will say they want their pound of flesh.”
Both Adami and Weiss are looking for Netflix to trade lower. “If Netflix closes below $200, it’s Katy bar the door,” says Adami. “It becomes a broken growth stock selling at a ridiculous multiple.”
Jon Najarian and Brian Kelly agree. They too think $200 is a key level. If the stock breaks below that level they expect shorts “will pile on.”
However, Kelly adds if $200 holds it might not be a bad level to get in.
