Netflix shares jump 10%, but the company CEO isn’t getting too excited

On Tuesday morning, Netflix shares rose 10%, and then fell into the negative range when the third quarter earnings report was released. However, CEO Reed Hastings is telling investors to be wary of the “euphoria” surrounding the stock. “We do our best to ignore the volatility in our stock,” the company wrote in a letter to shareholders. The letter also referred to the 2003 period when Netflix was at its peak, and it had the number one stock on the Nasdaq. “We had solid results compounded by momentum-investor-fueled euphoria,” Netflix said. “Some of the euphoria today feels like 2003.”

There have been large shifts in stock prices over the years; they started at $8 went down to $3 up to $39 down to $8, and the pattern has continued. Stocks are now at $330 a share.

Hastings emphasized that share price adjustments cannot be controlled by the company, and added: “Momentum investors” are “driving the price more than we like normally.”

Netflix has exceeded analysts’ expectations though, as their third-quarter earnings were 52 cents a share, and polls conducted by Thomson Reuters resulted in an estimate of 49 cents a share.