Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Analyst firm Wedge Partners just lowered its earnings outlook on Ancestry because a recent change to subscription pricing probably wasn't factored into management guidance. After Wedge published its worries, Bank of America chimed in by calling the concerns "overdone."
Now what: Raising short-term fees while offering long-term discounts looks like an attempt to lock customers into longer-term commitments, and Wedge worries about sticker shock on those longer contracts. These changes can cut both ways: Detractors see Netflix (NAS: NFLX) taking a huge hit to subscriber counts from its recent rejiggering while Sirius XM (NAS: SIRI) enthusiasts see nothing but dollar signs in a long-delayed rate increase. Maybe I'm naive, but I'd like to think that Ancestry's leadership has done the math and arrived at a generally positive outcome from these changes. Then again, I also believe that Netflix will do all right.
The proof is in the pudding: Add Ancestry.com toMy Watchlist.
At the time thisarticle was published Fool contributorAnders Bylundowns shares of Netflix butholdsno other position in any of the companies discussed here.Motley Fool newsletter serviceshave recommended buying shares of Ancestry.com and Netflix.Motley Fool newsletter serviceshave recommended buying puts in Netflix. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool isinvestors writing for investors.
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