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tdp2664 InvestorPlace After trading over $300 in July, Netflix ( NASDAQ : NFLX ) should open trading Tuesday at less than $90 a share. It's all thanks to a brutal earnings report after the bell Monday that showed customers left in droves and revenue missed forecasts by a mile. The culprit is obvious: the ill advised Qwikster scheme that planned to split NFLX streaming services and DVD delivery into two separate operations instead of a one-stop website. Qwikster was ultimately killed before it became a reality, but the damage remains to the once-loyal customer base of Netflix. Of course, the story here isn't the fact that Qwikster took a toll on NFLX. That was painfully obvious months ago. The real story here is about the continued descent of Netflix stock — and whether the company will ever truly be able to recover. Hopefully NFLX shareholders were aware they hadn't seen the worst of this Qwikster debacle. Since September, we've known that the company may be dealing with a defection of up to 1 million Netflix customers due to price increases and general mishandling of the entire ordeal. And any Netflix investor or customer has surely strolled through online forums eviscerating the company and its CEO Reed Hastings for the move – proving anger has not abated. The true depth of this crisis became clear after the closing bell Monday. Netflix ended September with 23.8 million U.S. subscribers, down about 800,000 from June – significantly worse than expected. Going forward, things look ugly too. The lion's share of the company's U.S. subscribers are streaming customers, with 21.45 million as of the end of Q3. But Netflix expects fourth-quarter subscriptions to fall in the range of 20 million and 21.5 million. Flat at best? That's not very impressive. Worst of all, a planned expansion into the U.K. will be costly and the lack of expected revenue could mean a quarterly loss in the first quarter of 2012. So there you have it – a deep loss in current subscribers, the prediction of future losses and the chance of a money-losing start to 2012. You have to wonder if Netflix will ever get beyond the Qwikster debacle and the hubris of CEO Reed Hastings . True, Netflix saw a big jump in profits, from $38 million in the third quarter of 2010 to $62.5 million this year. Revenue surged to nearly $822 million, $9 million above forecasts. It's not like Netflix is going bankrupt. And even if NFLX gets to $80, that will still be an over 50% gain in two years – double the Dow Jones returns in that same period. But the writing is on the wall. Netflix said loud and clear that it didn't care about its customers, and has a lot of work to do if it wants their trust bank. This comes at the worst possible time, as the competition is heating up for NFLX. Hulu is considering an IPO , Amazon.com ( NASDAQ : AMZN ) and Facebook are going heavy with streaming video. Netflix has been on a red hot run for a few years now, and it's hard for investors to watch a darling stock like this crash to earth. However, those wishing and hoping for a second act at Netflix better have realistic expectations. The company itself has left the door open for future subscriber losses and a quarterly loss in 2012. Just imagine if management has miscalculated and things turn out much worse. Given the track record of CEO Reed Hastings and others at Netflix, that wouldn't exactly be a surprise. Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com , follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook . As of this writing, he did not own a position in any of the aforementioned stocks.
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