Shares of Netflix (NASDAQ: NFLX) are riding a roller coaster this fine Monday. The streaming video giant's stock opened on a high note, jumping as much as 4.3% higher in the session's first 10 minutes before breaking downward for the next hour and a half. There, Netflix shares bounced off a near-breakeven floor to climb all the way up to a 5.6% gain as of 3:15 p.m., EDT.
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Here's the funny part. None of these gains were based on positive news.
Sure, there's always news about Netflix, but all that chatter has been negative today. The Cannes festival will block the company from competing at this summer's event, punishing Netflix for its refusal to screen its high-budget movies in theaters. Some investors are worried about the company's data collection policies breaking the same rules that Facebook's social network are violating, perhaps landing the video veteran in hot water later on.
All of this might explain the mid-day droop in Netflix's share prices, but there's no rocket fuel pushing the stock higher.
This is nothing but the normal gyrations of a volatile growth stock on a quiet day. Netflix investors have taken a bit of a haircut in recent days, and the stock closed Friday's trading at levels not seen since March 2 -- a three-week space of dead air and 8.5% below Netflix's mid-month highs. You could argue that investors are simply forgetting about last week's signals of surging competition from Disney and Apple, or you could call it a return of stalled market momentum. All of these are reasonable explanations, but not enough to clarify an $8 billion increase in Netflix's market cap.
But there is no right answer, just tidy little heaps of circumstantial evidence. In a world of imperfect information, stocks will sometimes make big moves for no real reason, and this is one of those mysterious jumps. The Netflix story did not change today, but the next earnings report is due about a month from now. Feel free to shrug off Monday's silly market moves and keep an eye out for that business update instead.
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Anders Bylund owns shares of Netflix and Walt Disney. The Motley Fool owns shares of and recommends Apple, Facebook, Netflix, and Walt Disney. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.