Netflix (NFLX) missed their subscriber quote, leading to a near 15% drop in the aftermarket. This made national news, spanning to non-financial news sources like the New York Times. But is this as big of a deal as others are making? Is Netflix in financial ruin? The simple answer is no.
While we like to assume the market is rational, it is made up of sea of irrational beings. A company that beat earnings expectations, and still grew their costumer base, is one that does not lose 15% of it's value in mere minutes. What many have forgotten, is that Netflix is still poised to overturn the cable television industry. It already destroyed the movie rental business, and the company is on track to do the same within the television sphere.
Taking advantage of this clear overreaction presents a clear margin to make a heavy profit. Don't forget that the stock closed over $400, and price changes like this don't last very long.
Disclosure: I am/we are long NFLX.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.