Will Netflix Price Hikes Raise Its Stock Price?

Netflix, Inc. shares jumped more than 5% on Thursday after the company announced that the price of its standard service would increase from $9.99 to $10.99 per month. In addition, the company’s premium service that includes more devices and ultra-HD resolutions will increase from $11.99 to $13.99 per month. The higher prices are designed to help offset more than $6 billion in spending on original content production.

Many investors are betting that the higher prices won’t be enough to deter many subscribers from Netflix, especially because its service remains significantly cheaper than cable television. However, Wells Fargo analysts believe that the move could help The Walt Disney Company as it rolls out its own streaming app for its existing content. Hulu – owned by Disney, Comcast Corporation and Twenty-First Century Fox, Inc. – could also benefit. (See also: Disney Will Need 32M Subscribers to Beat Netflix.)

Shares soared earlier this week after Netflix raised prices, but traders will be watching these key support levels. …read more

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