Getting Greedy: What Raising Fees Did For Peloton, Netflix
Tim Knight | Jan 24, 2022 11:13PM ET
I noticed something interesting lately. A week or two ago, Peloton (NASDAQ:PTON) announced they would be cranking up fees to deliver their stationary bicycle to homes by hundreds of dollars. Not long after, the stock collapsed.
Similarly, a couple of weeks ago, Netflix (NASDAQ:NFLX) announced they’d be raising their subscription rates (which they appear to be doing on a regular basis these days). Not long after, the stock collapsed.
It reminds me of being at Apple (NASDAQ:AAPL) in the late 1980s. They were sort of out of product ideas, so they decided the best way to increase profits was to simply raise prices. They did so, using “memory chip cost’ as an excuse. Not surprisingly, their already not-very-popular computers got even less popular.
It seems to me a sure sign that a company is about to turn south when they start getting greedy, since they can’t think of anything else better to do.
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