Call this a win for humanity.
On Wednesday, Netflix reported second quarter earnings that beat expectations. This news sent the stock higher by more than 10%. And this for a stock that had already doubled in price this year.
But the Associated Press’ robo-earnings report made a big, embarrassing mistake.
In its report, the AP said, “Netflix shares have decreased 71% since the beginning of the year, while the Standard & Poor’s 500 index has risen slightly more than 2%.”
This is wrong. But there is a simple mistake the robot made that any thinking human would have (hopefully) not made.
On Wednesday, Netflix shares began trading on a split-adjusted basis. This means that every 1 share of Netflix you owned previously became 7 shares.
As a result, the price of Netflix stock — which was around $US700 on Tuesday — was closer to $US98 on Wednesday. Except, since you now own 7 Netflix shares, nothing changed.
If you looked at the price of the stock and didn’t back out the split-adjustment, you would have thought the stock went down almost 80% overnight.
At least on Wednesday, it seems like humans won.