Despite gaining subscribers from last quarter, producing hit new original content like "House of Cards" and "Orange is the New Black" and gaining its first Emmy nomination, Netflix's shares have sunk as much as 4.5 percent in pre-market trading.
According to Reuters, Netflix's stock is set to open around 4 percent lower after the online entertainment company reported quarterly subscriber growth as being less than it expected. This undermined investor's hopes for the subscriber-based video-streaming giant.
The company announced that it had added 630,000 streaming customers in the United States in the second quarter, but it was expecting 700,000. The shortfall led to as much as an 11 percent fall in the company's stock.
Despite the drop, analysts say they're encouraged by Netflix's progress in creating its own original content. Although it isn't meeting expectations, many still believe it will remain profitable in the U.S. in the long run. So far it has been one of the biggest risers of any of its competition this year as it continues to add more shows and original content. According to USA Today on the first market day of the year, January 2nd, Netflix shares closed at $92. Today it more than double that number.
"We believe the overall trajectory of net adds remains strong and we're confident that originals (shows) will have a significant positive impact as they accumulate audiences and build brands associated with Netflix over time," JP Morgan analyst Doug Anmuth said in a note, via Reuters.
The streaming company made a splash this week by being the first ever web-based series to get Emmy nominations. Between its political thriller "House of Cards" and quirky revamped cult-hit "Arrested Development," Netflix took home 14 nominations. Meanwhile, its latest original series "Orange is the New Black" is making its way through consumer's instant queues.
Netflix's shares closed at $261.96 in the Nasdaq on Monday.
