Cramer: The one word that took Netflix down

The Get Down - "Rule the World" - Netflix [HD]

For the first time ever price mattered for Netflix. It seemed as if the mere fear of the pending price increase is what weakened U.S. numbers, Cramer said.

"I found myself thinking, at least they didn"t lose any," he said.

Before the second-quarter results, price had not mattered for Netflix. Cramer regarded it as part of a holy trinity of memberships that consumers were willing to pay for that also includes Costco and Amazon Prime.

No one knows why the un-grandfathered subscribers decided not to renew the service. Cramer noted that Netflix didn"t get it, either. He read over the comments from the team multiple times, and he still couldn"t figure it out. It did not make sense that subscribers would leave because of a few dollars, especially when compared to the price of a cable bill.

Cramer didn"t get the last miss from Netflix when it pinned most of the blame on Australia, either. He didn"t get it when Netflix also blamed the previous quarter miss on an issue with credit card migrations. But he was willing to overlook each one because he knew that the audience loved Netflix.

"Now, I am not so sure. You just shouldn"t be getting this level of Netflix cutting. And the lack of domestic growth isn"t being made up overseas, like it used to be," Cramer said.

This simply became one of those bad quarters that prompted Cramer to think the stock just can"t be bought because management didn"t give investors a reason to do so. It kept guidance for next year, but that was not enough.

With three straight quarters of misses, he doesn"t think the company will be able to get ahead of it until the "un-grandfathering" is finished at the end of the year.

"Perhaps you were listening to an old call, when the idea that someone wouldn"t pay up for Netflix was inconceivable. Not anymore," Cramer said.

Source: http://www.cnbc.com/2016/07/19/jim-cramer-the-one-word-that-took-netflix-down.html