Diamonds and Dogs
Netflix subscribers not so loyal after all. Netflix (NFLX) is down 13%, the worse day since October 2014, after missing estimates and lowering guidance. The company blamed weakness on higher-than-expected level of customer churn due to "un-grandfathering" of fees. The company is also blaming the pending Olympics and a slower ramp of international subs for the current quarterly weakness. The good news is the analysts believe long term Netflix should continue to grow subscribers especially overseas.
VMware (VMW) bucking the trend. VMware is surging by 9% to a new recent high thanks to better than expected earnings. The Palo Alto-based cloud and virtualization company posted adjusted earnings for the second quarter of 97 cents per share, up from analysts' estimates of 95 cents per share. Sales spiked 11% from 2015 to $1.69 billion, surpassing estimates. The CEO said the quarterly numbers were a continuation of the good start to the year. That's good news since the stock is still down 38% from the 2014 highs.
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