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Netflix stock booms on streaming growth

July 05, 2012|By Ben Fritz
  • Netflix stock surged 13% on Thursday after the company reported that it streamed more than 1 billion hours of video in June.
Netflix stock surged 13% on Thursday after the company reported that it… (Netflix.com )

Netflix shares surged 13% on Thursday as investors gained confidence in the company's growth prospects following this week's news that subscribers streamed more than 1 billion hours of video in June.

The increase followed a 6% rise on Tuesday, taking Netflix's stock to its highest point since mid-May. The shares had been in relatively steady decline since early spring because investors were skeptical that Netflix would meet its goal of adding 7 million new streaming customers in the U.S. this year.

Shares in Netflix fell from $121.99 in late March to $62.66 in mid-June. At the close of trading Thursday they were at $81.72, up $9.68, or 13.4%.

Netflix Chief Executive Reed Hastings revealed Tuesday on Facebook that the company's customers worldwide streamed more than 1 billion hours of television shows and movies in June, a new record. That revelation apparently gave investors more confidence that the Los Gatos, Calif., company can achieve its goal of reaching more than 30 million online subscribers in the U.S. by the end of 2012.

As of March 31, Netflix had 23.4 million streaming customers in the U.S. and an additional 10.1 million DVD customers (some people are counted in both groups). It also has 3.1 million subscribers who watch streaming video in Canada, Britain, Ireland and Latin America.

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