While many have discussed the significance of Netflix’s impressive third quarter, we’d like to dive into how the markets reacted to this news. In short, it was a virtual clap, with shares jumping 14% in after-hours trading and reaching a price not seen since late April.
The Shift in Market Reaction
For those familiar with quarterly earnings from public tech companies, you may recall that outstanding growth used to be met with little more than a shrug. Why? Because it was already "priced-in." This phenomenon has been evident in the market’s reaction to good news: no reward for meeting expectations.
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