Netflix shares jump 42% to new high
Netflix's rollercoaster ride on Wall Street has surged to new heights.
The company's stock climbed 43.60 US dollars (£27.56) to close at 146.86 US dollars (£92.83) as investors celebrated a fourth-quarter earnings report highlighted by accelerated growth in its internet video service.
The 42% increase in Netflix's market value marked the stock's biggest single-day gain since it went public more than a decade ago when investors were still shunning internet businesses in the wake of the dot-com bust.
Most investors were spurning the company again less than five months ago when billionaire Carl Icahn decided to go against the grain and buy 5.54 million shares to secure a near-10% stake in the company.
Icahn's original 324 million US dollar (£204.80) investment in Netflix has already more than doubled to 814 million US dollars (£514.61).
The last time that Netflix's stock came close to soaring like this was in October 2002 when the shares rose nearly 36% in a single session. That gain, though, was not quite as impressive because Netflix's stock closed at a split-adjusted US dollar 3.55 that day. The meagre valuation reflected widespread doubts about a quirky company trying to make money renting DVDs with a monthly subscription service that delivered the discs through the mail.
Although it still operates its shrinking DVD-by-mail rental service, Netflix is now leading the way into a new era in home and mobile entertainment. The company's main subscription service now streams movies and TV shows to any device with a high-speed connection, freeing consumers from the shackles of conventional television viewing.
Netflix expects to build on the momentum by adding as many as 2.1 million more subscribers in the current quarter, which will include the release of a highly anticipated TV series House of Cards, made exclusively for the company.
In the coming months, Netflix will debut several more pieces of original programming, including the fourth season of the critically acclaimed Arrested Development, which ended its run on network TV in 2006.
"People love Netflix, but the original programming is something magic," chief executive Reed Hastings said in an interview. "It is definitely going to take our relationship with (subscribers) to an even better and more intense place."