RSSNetflix, eBay help trigger a further NASDAQ plunge
By Scott M. Fulton, III | Published October 6, 2008, 6:06 PM
Sometimes when investors get the feeling in advance that it's going to be a bad day in the markets, it doesn't take too much bad news to validate their fears. This morning, some relatively minor bad news had a magnified market impact.
Early this morning, Netflix made some admissions that, on a normal business day, would be viewed as a minor downtick in an otherwise healthy company. It missed its nationwide subscriber goal for the past quarter by 3,000. No, not three million -- three thousand, with 8.672 million subscribers at the end of the third quarter.
There was some potentially worse news to come, however: The company has reset its subscriber projection lower by 3%, from a mid-range of 9.4 million to a mid-range of 9.1 million. That would still be a sizable gain in subscribers from the fourth quarter of 2007. But while July looked good for Netflix, its executives said, its August looked bad; and while the final numbers for September aren't yet compiled, it's probably worse.
How much worse? Revenue projections for the fourth quarter were cut by 1.7%. Like I said, on a normal day, you might not even be reading this.
Strike three came from SAP, Germany's largest software maker, which today trimmed its estimates of earnings from services down to a "mere" 14% annual gain. In so doing, the company blamed the global economic crisis.
With an already bipolar investment climate, three little downticks were as good as a full-blown omen. Huge losses were felt in both the NYSE and NASDAQ exchanges by mid-afternoon, during which the Dow 30 had dropped over 800 points and the NASDAQ had hit a four-year low. But bargain hunters saved the day, capping losses to 4.3% for the NASDAQ index at 1,862.96; and the Dow bouncing back to only a 3.6% loss, down 369.88 at 9,955.50 -- still below the psychological "floor" of 10,000.
Most of the other tech stocks were dragged down by the weight of it all. Microsoft tumbled another 5.4%, HP was down 4.8%, Yahoo was down 4.3%, struggling AMD lost another 6.6% to close at $4.23, and Adobe Systems shed 9% of its value to close at $30.64. Sirius XM was also hit very hard -- shedding only $0.08 of share value, but that's a 13.7% loss when your stock is already trading at only $0.50.
ebay is still solid - just a victim of it's own success. They just need to trim down a bit.
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"How can things be good when everyone that should be in the "know" say they have no clue what is going on and how to fix it...."
Who in hell are you listening to?
The causes are well known!
The sub-prime loans were just a very small tip of the iceberg!
The derivatives market was where the geniuses repackaged and bought/sold 'credit default swaps' - packaged as uncollatereralized 'insurance' - which were never called insurance, as that would have required adequate capitalization.
As the sub prime loans came due, the credit default swaps were not sufficient to mitigate the shortfalls!
An listening to the various idiots here trying to tie this to any one politician, instead of the world market - in particular The City who came up with the credit default swaps - haven't a clue.
Come to discover, the derivatives market is a shadow market house of cards, and the entire industry is based upon it. Enjoy.
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Missed by an entire 3000 subscribers? o_O That's freaking good compared to the software glitch in August. o_O geesh. This would be part of the "Panic" going on with Wall Street. Even a pin dropping on someones shoe would cause alot of pain.
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How can things be good when everyone that should be in the "know" say they have no clue what is going on and how to fix it....
Why is everyone so suprised to see it go down but when it goes up year after year it's expected?? Are recessions a thing of the past??
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I fully expected it.
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Then with any brain you should be filthy rich now - so what are you doing here?
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filthy rich cows need to waste time too, ya know. :p
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Yes, I do... Still can ask what he's doing here, no? :)
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Sure, but then, I could ask you the same thing, aye? ;)
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Yeah, but you didn't.
Alright, this is getting stupid...
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Getting?
Nah, Foxy posted at 2:52 AM...it's been stupid for a while now. ;)
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Yes, well - I apologize. He is still in training.
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