Yesterday, Netflix let the world know that they’d lost almost a million subscribers. Today, the shareholders reacted to that news the way that shareholders tend to react to terrible earnings news: they sold the stock. Netflix stock dropped a whopping 37% by only 9:39am Eastern Time this morning, in what Bloomberg says is the single biggest intraday stock decline since 2004.

Netflix Stock Drops 40% In One Day

The negative news is projected to continue for a while, with Netflix stating they now expect to lose money in 2012 due to both the loss in subscribers and the costs to roll out to other international markets like the UK.

Netflix CEO Reed Hastings tried to downplay the subscriber loss yesterday, instead talking about the promise of the future. He said things like this:

“Our streaming marketing has been very effective in the past two years. We are going to work on improving the user interface, expanding to more platforms and delivering more content. There’s no grand gestures, there’s just a lot of steady and intense efforts.”

But shareholders aren’t sharing Hastings’ optimism, and have begun ditching the stock.

Now, I probably don’t have to tell you this, but the stock losses are probably a much bigger concern for Netflix than the subscriber losses. Subscribers have now dipped, after the new loss of 800,000, to 23.8 million (at the end of September). No one wants to lose a million customers, but let’s not forget Netflix still has 24 million customers left.

The stock market is a jumpy, edgy place. And the last thing Netflix needs is for even more shareholders to start panicking and worrying, selling off their stock as well.

When pressed on the issue, Hastings stated he had no intention of stepping down, and reminded that he had led the company from its inception and he would continue to do so.

What Does It All Mean?

It means Netflix is hurting… in a real way… and more than they really wanted us to believe–probably more than they expected. But does it mean they’re through? Certainly not.

There are still no true competitors on library size and price, and Netflix’s recent content deals with Dreamworks, AMC, & The CW signal a renewed commitment to keep the content current and fresh.

I’m still a subscriber, and the reason is pretty simple: I still get enormous value out of the service. Maybe that’s just not true for some other people at this point… fair enough. But I have a feeling that the fallout from this summer’s Netflix price hike will eventually die down. They’ll end up with subscriber loss and probably less-valuable stock… but they’ll live to fight another day.

Or maybe I’m crazy, and this is the first nail in the coffin of a once-fine Internet service. What do you think? Are you still with Netflix, or are you one of the ones that left?