Five months ago, Netflix was a Wall Street darling on top of the world, with shares at over $300 per share and seemingly assured dominance in the online streaming space ahead of it.
Then, disaster. After a series of missteps, including a surprise change to its pricing structure and an abandoned plan to split the service in two, the stock fell precipitously and has been fluctuating ever since.
Rumors that Verizon was considering buying Netflix to launch its own streaming site sent the stock soaring earlier this week, though there have been conflicting reports on the state of that acquisition. Media analyst Porter Bibb told Bloomberg Businessweek that Verizon was “very serious” about making a potential offer for Netflix. But just a few hours earlier, there was a report from Bloomberg citing two “people with knowledge of the situation” who said the companies weren’t in any talks at all.
On Wednesday, Netflix’s stock took another hit as rumors of a federal investigation into the company spread. A short item from Disclosure Insight, which specializes in providing Securities and Exchange Commission data to analysts, said that it has information indicating that Netflix was the subject of an undisclosed SEC investigation. The short write-up did not reveal why the company may be under scrutiny.
Netflix did not immediately respond to a request for comment on reports of the investigation.
Around 3 p.m., the company’s stock was trading at $71 per share.