This is a very natural phenomenon, and there's an obvious reason. When you're a growth stage company you're valued as a growth stage company, your Price:Earnings ratio will be high, because investors are already pricing in the future earnings. As your growth slows your P/E ratio drops because investors no longer expect your earnings to go up. This is fine, it's the natural process when you're saturating your market. But it causes all sorts of problems - all your engineers are paid in stock for example, and now they're underpaid versus the industry. That's fine, you don't need the same quality of engineers when you've dominated a market. You've built the thing. It's done. Let them go and build the next thing.
But the engineers aren't the only ones who are paid in stock - so are all the executives. And they want money! So you must keep the growth up. So at this point you do what Netflix is doing - start exploring other markets that you can use your existing skills to dominate. Now most likely that will fail, because by nature, you're taking the money from the home run you hit and betting on hitting another even bigger home run. For every 1 Netflix there were 10 failed competitors. But Netflix now has to try and be another Netflix, but will most likely spend their money creating 1 of those 10 failed competitors.
But the engineers aren't the only ones who are paid in stock - so are all the executives. And they want money! So you must keep the growth up. So at this point you do what Netflix is doing - start exploring other markets that you can use your existing skills to dominate. Now most likely that will fail, because by nature, you're taking the money from the home run you hit and betting on hitting another even bigger home run. For every 1 Netflix there were 10 failed competitors. But Netflix now has to try and be another Netflix, but will most likely spend their money creating 1 of those 10 failed competitors.