No one’s perfect, obviously, and we all make mistakes at some point no matter how dumb or illogical they seem. Netflix just made one themselves on a recent SEC filing, and it was caught this morning. However, it wasn’t just a simple misspelling or a missing comma. The typo was fairly significant and completely shocked investors.
All SEC filings are crucial for investors, but this particular filing was especially important, because investors wanted to know how Netflix’s finances were doing as the company began to expand to other countries — specifically if Netflix was spending more than it could afford on the expansion. Netflix reported last week that its new services in Latin America, the UK, and Ireland “have contributed to a 14% increase in [Netflix's] content expenses in the International segment.” However, the increase was actually 348%.
Netflix claimed it as “a typographical error” and changed “14%” to “348%,” which actually showed up twice in the report at 14%. Obviously, a 348% increase is an insane jump from 14%, and worst of all, investors were specifically focused on that figure, so seeing a change to 348% probably wasn’t what they wanted to see.
This certainly adds insult to injury for Netflix, who expected to add seven million streaming subscribers in the US during 2012 at first, but recently lowered that number down to five million last week. It’s not said what investors might do, but Vasily Karasyov from Susquehanna Financial Group said that “it’s fair for investors to wonder” whether or not Netflix has gone too deep in growing its international market.