Company News: A doubly bad day at Netflix

Netflix Inc. frustrated investors and customers alike Tuesday as its stock price plunged to its lowest point in more than two years while its Web site was inaccessible most of the day because of unexplained technical problems.

The 7 percent drop in Netflix’s shares wasn’t a shock after the Los Gatos-based company reported the first quarterly customer losses in its history and dimmed its earnings outlook for the rest of the year.

But the Web site outage was a surprising — and embarrassing — setback.

The online hub of Netflix’s rental system went down Monday evening and remained unavailable until Tuesday afternoon, locking out subscribers for more than 18 hours. Spokesman Steve Swasey attributed the outage to an unanticipated problem that he declined to describe.

Lowering prices will erode Netflix’s profit — a sacrifice that the company is making in an attempt to regain market share from Blockbuster. The decision led to a further drubbing of Netflix’s already battered stock, which has plummeted by 38 percent this year.

The shares dropped as low as $15.62 early Tuesday, their lowest point since June 2005. The stock later rebounded, but still finished down $1.20 at $16.07.

“AT&T Inc. wiped some of the glow off Apple Inc.’s iPhone on Tuesday, releasing numbers that showed fewer people than expected signed up for service in the first two days of the multimedia cell phone’s release.

AT&T — the iPhone’s exclusive carrier — said it activated 146,000 iPhones on June 29 and 30, a number that disappointed investors following some analyst forecasts that Apple would sell 500,000 or more iPhones in its first weekend.

The news interrupted a steady rise in Apple’s stock price that started with the iPhone’s release.

“General Motors Corp. will add a third shift and about 500 temporary workers at its plant near Lansing where it builds crossover vehicles, but it also is cutting jobs and pickup truck production at a plant in Pontiac.

GM said the Pontiac downsizing is due to a slumping pickup market nationwide, and the increase at the Delta Township plant near Lansing is due to rising demand for the Buick Enclave, Saturn Outlook and GMC Acadia crossover vehicles.

About 500 temporary workers laid off earlier in the summer likely will get a chance to return to the Delta Township plant when the third shift is added Sept. 4, but the details must be worked out with labor, GM spokesman Tom Wickham said Tuesday.