Netflix's Stock Crash In Context

Everyone is astounded by the collapse of Netflix’s stock.

And the drop has indeed been breathtaking.

After hitting a high of $291 in July, Netflix (NFLX) has fallen to $113, a drop of more than 60%.

Ouch.

But when one takes a longer-term perspective, the drop quickly seems like much less of a big deal.

Netflix’s stock is now back to where it was in mid-2010, just over a year ago. And it’s still up more than 20X from a low of $5 back in 2002.

What’s more, Netflix’s stock has already weathered one even worse drawdown: A drop of about 75% from 2004-2005, when the company launched a price war against Blockbuster. (We know how that one turned out).

Here’s a log-chart of Netflix’s stock from its IPO to today. (Unlike a linear chart, which treats all dollar increments equally, a log chart plots percentage-moves equally). It puts the crash in context.

Netflix Stock

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