Netflix if feeling the effects of competition in its stock value

Netflix shares just finished erasing the 46% gain they registered from the start of the year through July. Monday saw the stock drop another 1.8%, capping off the downtrend that’s seen the stock come from the highs above $380 a share in July to Monday’s close at $265.92 a share, which also gives the stock a loss of 0.65% since the start of the year.

Netflix chart YTD

The drop is definitely shocking to Netflix investors, and it could get worse as the company is increasingly seeing competition from many directions, including the Disney+ and Apple TV+ offerings due to launch this fall. As a company that has yet to face any strong competition, Netflix is expected to need to make changes going forward if it wants to maintain its lead in the streaming media space.

One adjustment the company faces is the loss of pricing power that allowed it to hike its U.S. subscription prices by as much as 18% this past January. That price hike was applauded by investors, but now that both Apple and Disney are undercutting Netflix pricing it isn’t likely investors would be very happy with another price increase anytime soon.

Netflix is also contending with a loss of subscribers in the second quarter just as consumers are being given a much larger choice of which service they would like to subscribe to. That could hinder Netflix efforts to increase subscriber counts going forward.

Finally, expect costs to rise as Netflix will have to compete for content and for the means to produce their own content.