NetFlix (NFLX, $31.78, up $0.62) has just reported an outage of some sorts with its website or database that could affect up to a third of its customers. The worst thing that can happen to a website that relies on the Internet for its success is a website outage or a database issue. For a company that relies heavily on the Internet for sales, it will be interesting to see how the stock reacts.

This isn’t the first time there has been an outage of course but with Netflix it appears to happen often. The company is working “feverishly” to resolve the issue and has said it will make an adjustment to its monthly bill for customers.

This will hit the bottom line and it may or may not have a huge impact but it will have some type of impact. Netflix has been strong sine the beginning of July, rising from $26 to its current price. Notice how the stock went up as oil kept rising?

Netflix has been benefiting from the economic slowdown since people tend to be staying home to watch movies instead of going out to eat, or spend gas money to just cruise around. And let’s not forget the huge partnership with Microsoft (MSFT, $27.97, up $0.06) that allows X-Box users to hookup for free.

The stock is currently trading higher but the news just broke. The news may not hurt the stock too much because of the strong catalysts but let’s just watch the September 30 puts (QNQUF, $1.07, down $0.53) and see how this one plays out.

Rick Rouse
Rick@OptionsMentoring.com