As you all know, a few classes ago we discussed Netflix’s decision to split its company up into a mail-in service company, and a streaming company (still called Netflix).

I now invite you to take a look at the Netflix stock…

As you can see, it has been hit QUITE hard in the past year or so. Someone not in Sauder would look at this and think “falling stock = bad company”, but a Sauderite may think differently…

I personally see a buying opportunity. The stock market is not solely based on fact – it is also based on emotion. If the market “thinks” a decision is bad, then the market reacts, and generally overreacts. In this case, Netflix’s loss of customers gave the market the impression Netflix was going to lose money, and therefore become less valuable. Of course, in class we all decided this risky decision may actually make Netflix more profitable.

I am going to look into this company a bit more, but unless I find something dramatic, I will be investing. The Market is moody, and overreacted. I plan on cashing in on its apology.