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Netflix Needs to Reach the 75 Million Subscriber Mark

On Tuesday, following the closing bell on Wall Street, Netflix will report its results for the fourth quarter. The big number for Netflix is 75 million, meaning 75 million monthly subscribers.

The bottom line is most investors are not concerned with the company’s revenues or even its profits. The stock lives as well as dies by the global subscriber count for the streaming video service.

Last October, Netflix announced that it was expecting to end the fourth quarter of 2015 with over 75 million subscribers. The consensus estimate on Wall Street is that number will reach 74.6 million.

Merely meeting its expectations will not be enough. Netflix stock more than doubled during 2015. It is the star-studded momentum stock if there ever was one. Many of the company’s investors are fickle and demand perfection.

A twitter poll was conducted on Monday and the vast majority who participated believes that Netflix has topped the threshold of 75 million subscribers.

In October, when the company reported that its domestic subscriber growth had slowed somewhat during the third quarter, the stock plummeted by 8%.

Of course, the stock recovered quickly hitting a new high of all-time by the early part of December. However, like the rest of Wall Street, it is off to a rough start to the New Year.

Thus far, after just 17 days of 2016, the stock is down 9%. Although stopping and thinking about the stock, a 9% drop for a stock, which has surged close to 135% during 2015, is not all that bad.

The truth is Netflix thus far has fared better than Nasdaq has, which has dropped over 10% during 2016.

Amazon, the streaming rival to Netflix, which more than doubled during 2015, has plunged by 16% to start the New Year.

Therefore, there will be huge pressure for Netflix to hit that big number and post a strong number for the fourth quarter while giving a strong outlook for the 2016 first quarter.

Reed Hastings the CEO at Netflix declared triumphantly at the Las Vegas CES 2016 at the beginning of January that Netflix was in nearly every major world market with the only notable exception being China.

That news likely has held the stock up more than other stocks as on just the day the CES announcement was made, the stock shot up 9%.

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