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Photo: Getty Images

Since announcing it had shelled out half a billion dollars for rights to stream "Seinfeld" starting in 2021, Netflix's stock has been careening downward, highlighted by Friday's 5.5% drop.

What's happening: The stock has been challenged for much of the year, but suffered mightily after what initially looked like a reprieve in July until it released disappointing Q2 earnings showing it lost more than 100,000 subscribers in the U.S. (It was expected to gain over 300,000.)

  • Since touching $380.55 a share on July 1, a shade below its 2019 high, Netflix's stock has lost nearly a third of its value.
  • After Friday's selloff, shares had fallen to $270.75, nearly 10% below where they were on Sept. 17, the day after announcing the "Seinfeld" deal.

The big picture: Investors soured on the company as the streaming wars heated up in recent months with other companies preparing to unveil new, lower-cost streaming options.

  • Netflix CEO Reed Hastings warned that production costs, which have already been significant, are going to climb even higher with the increased competition.
  • He pointed to the likes of Disney+ and AppleTV+, which will be available for $6.99 and $4.99 a month respectively, undercutting Netflix's $8.99 price point.

What they're saying: "While we've been competing with many people in the last decade, it's a whole new world starting in November," Hastings said in a Friday interview with Variety.

  • "It'll be tough competition. Direct-to-consumer [customers] will have a lot of choice."

Short sellers have been swarming. Data from S3 Partners shows Netflix has become the 4th most shorted stock in the U.S., with a little over $6 billion of short interest and 20 million shares shorted.

Yes, but: Investors are far from abandoning the stock. Netflix remains one of the most held stocks in the world, and was fourth among top holdings of hedge funds, according to recent data from Goldman Sachs.

  • Increased competition may not be that harmful to Netflix. In an August survey from data analysis company Civic Science, only 2% of respondents said they would ditch their Netflix subscription for Disney+, Hulu or ESPN+, while 33% said they would keep Netflix and not subscribe to the others.

Go deeper: New streamers battle over old shows

Go deeper

Updated 8 mins ago - Politics & Policy

Inauguration Day dashboard

U.S. Capitol and stage are lit at sunrise ahead of the inauguration of Joe Biden. Photo: Patrick Semansky - Pool/Getty Images

President-elect Joe Biden and Vice President-elect Kamala Harris have arrived at the Capitol. Members of congressional leadership and VIPs will soon be introduced. Watch a livestream here.

What's next: Biden and Harris will take their oaths of office. Shortly after, President Biden will deliver his inaugural address. What to expect.

Dan Primack, author of Pro Rata
49 mins ago - Economy & Business

Momentum builds for major antitrust reform

Illustration: Aïda Amer/Axios

President Trump's outgoing antitrust chief Makan Delrahim on Tuesday endorsed a proposal from House Democrats that would put new limits on acquisitions by large companies, during comments made at a Duke University event.

Why it matters: Momentum is building for major antitrust reform, updating rules that were written for railroads instead of routers.

Updated 2 hours ago - Politics & Policy

Trump departs on final Air Force One flight

President Trump and his family took off on Air Force One at 9 a.m. on Wednesday morning for the final time en route to Florida.

The big picture: Trump's final hours as president were punctuated by his decisions to snub his successor's inauguration and grant pardons to many of his allies who have been swept up in corruption scandals.

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