(Yahoo Finance) Netflix plunged as much as 4.89% Wednesday, hitting a low of $321, a level not seen in more than three months. Shares are trading in a bear market — down more than 23% from their June highs.
Wednesday's selling comes as tech stocks have come under pressure in the wake of Chinese tech giant Tencent reporting its first profit drop in almost 13 years. The disappointing results have reignited fears the tech giants responsible for the market's gains this year are becoming vulnerable.
Netflix shares have been under pressure ever since the streaming giant reported underwhelming second-quarter results on July 16. The company posted $3.91 billion of sales and added 5.1 million subscribers, missing the $3.94 billion and 6.3 million that Wall Street analysts were expecting. Netflix also warned of subscribers would fall short of estimates in the third quarter.
All these underperformance are warning signals in the eyes of Michael Pachter of WedBush, a long-standing Netflix bear. "They're in a vicious spiral to the bottom in content spend," Pachter, who has a $125 price target, recently told Business Insider.
He says Netflix needs to raise its prices to around $20 a month, nearly double its current fee of $10.99 a month.
Netflix shares are up 70% this year.