Social Media Volume Is Falling At Netflix

A 7.5 percent stock increase in February made for a great month for Netflix investors, but underlying consumer enthusiasm for the company was a different story.

Here's the scoop:

Netflix saw daily social mention volume drop by over 18 percent in February compared to the previous month.

Netflix positive sentiment also decreased slightly in February, ending the month at 88.4 percent positive.  That's still very high compared to other media companies, but lower than the 90 percent level Netflix usually gets.

Most of the decrease in sentiment can be traced to disappointment around the the much anticipated Season 3 of House of Cards, which Netflix released late in February…

Obviously, bad customer reviews for the company's flagship series isn't a good thing, but what this author finds more concerning is the significant drop in mentions all together.  

Netflix wants to be a company that people talk about enthusiastically — word of mouth is their most profitable subscriber-acquisition channel.  

The best trade opportunities come when there is a disconnect between stock price action and social trends, which is what could be happening here.  

It's too early to call this drop in enthusiasm a red-flag for Netflix, but if investors see more decline in social volume and sentiment over the next few weeks, trade opportunities could arise.

Of course, the primary focus is always looking for outliers where social mentions indicating purchase-intent are inconsistent with the expectations of Wall Street like this.  

With Netflix, LikeFolio is specifically watching for the number of social mentions around subscribing and canceling.