Netflix's undoing and recovery

Coming off a difficult year, Netflix is showing signs that it's righting the ship, adopting a poison pill to prevent a hostile takeover and scoring a huge licensing deal with Disney.

James Martin/CNET

The luster came off Netflix in 2011. A bungled price increase and an aborted attempt to spin off DVD operations made the company appear poorly managed. That triggered an 18-month-long slide in the company's stock, and Netflix looked ripe for an acquisition. But the Web's top video-rental service is leaving 2012 on a high note. In November, the company implemented a "poison pill," provisions designed to make acquiring the company very expensive, and girded itself against a possible hostile takeover attempt from corporate raider Carl Icahn.

Then, earlier this month, Netflix leaders pulled off a whopper licensing deal with Disney. The company became the first Internet subscription service to acquire exclusive distribution rights during a time period typically reserved for pay-TV services, such as HBO and Starz. We'll have to wait and see if Netflix can return to the days of adding 1 million subscribers or more every quarter and raise its stock price back to around $300.

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