Netflix Is Vulnerable to New Technology

Netflix (NFLX), an online rental movie provider, could be poised to move further to the price downside. The price chart of NFLX shows two major price cycles with the stock currently on the downside of the second cycle.

NFLX has been successful attracting millions of customers. For a fixed monthly fee subscribers order movies online and Netflix ships the DVDs free of charge. When you return the DVD, you can order more. But this business model could see a sudden death when movies can be downloaded to a computer and then viewed on a home television. Be leery of this volatile stock.

Posted September 13, 2006.