Netflix Rallies after Customer Usage Surges in June (NFLX)

PUBLISHED: 06 Jul 2012 @ 06:41 | Comments (0) | More info about Ed Liston

Netflix Inc. (NASDAQ:NFLX) CEO Reed Hastings on Tuesday disclosed a huge spike in customer usage last month. The disclosure from Hastings sent NFLX stock sharply higher in trading today.

Hastings on Tuesday posted on Facebook that NFLX subscribers watched 1 billion hours of TV shows and movies in the month of June. This compares to 2 billion hours reported in the whole of fourth quarter of 2011. Hastings said that once House of Cards and Arrested Development debut, NFLX will blow these records away.

House of Cards will be streamed on Netflix later this year. Meanwhile, the company intends to air 10 episodes of Arrested Development next year.

Despite the significant surge in customer usage, some analysts are skeptical about the Los Gatos, California-based company’s ability to convert it into revenue.

According to Michael Patcher of Wedbush, the surge in viewing time might result in a rise in content costs for Netflix. Patcher has an Underperform rating on Netflix.

But, investors reacted positively to the surge in customer usage. NFLX stock rose to an intra-day high of $82.90 today before finishing the day 13.44% higher at $81.72 on above average volume of 14.86 million.

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