Netflix loses $50 billion off market cap in one disastrous day


Streaming giant Netflix suffered a $50 billion reduction in its market capitalization on Wednesday after its shares closed 35% after learning that the company had lost more than 200,000 subscribers and expects to lose more in the future.

The CNCB reports that shares of Netflix closed more than 35% on Wednesday after the streaming giant’s earnings report on Tuesday showed it had lost subscribers for the first time in a decade – and is falling. expected to lose more. The company has warned shareholders that it risks losing another two million subscribers over the next three months. “Our revenue growth has slowed significantly,” Netflix told shareholders Tuesday.

(Photo by CHRISTOPHE ARCHAMBAULT/AFP via Getty Images)

The significant drop in subscribers has caused Netflix to lose more than $50 billion in market capitalization. The streaming giant is now the worst performing stock of 2022 in the S&P 500, down 62.5% since the start of the year. Netflix cited several issues for its slow growth, including increased competition and the lifting of pandemic restrictions that had previously boosted the platform’s viewership.

Netflix also highlighted password sharing as a major problem, estimating that 100 million households share their subscription with family or friends. Netflix CEO Reed Hastings has previously described the practice as “something you have to learn to live with”, adding that in many cases password sharing is “legitimate” between family members.

Hastings said on Tuesday that sharing passwords was making it increasingly difficult to attract new subscribers in some countries. “When we were growing rapidly, it wasn’t a high priority to work on [account sharing]. And now we are working very hard on it,” he told shareholders.

Netflix could therefore roll out payment plans that it is testing in Latin America around the world. The goal is for users to pay a little more in order to add additional account profiles and enable password sharing. “The main way we have is to ask our members to pay a little extra to share the service outside of their homes,” said Greg Peters, Chief Product Officer of Netflix.

Bank of America analysts said in a Wednesday note: “While their plans to re-accelerate growth (limit password sharing and an advertising model) have merit, by their own admission, they will not have noticeable impact before 24, a long waiting period, which is now a “show me the story”.

Pivotal analyst Jeffrey Wlodarczak wrote in a Tuesday note, “After what can only be called a shocking first-quarter subscriber failure and weak subscriber and financial advice, we have reduced our guidance subscribers and significantly pushed back our profitability forecasts.”

Learn more about CNBC here.

Lucas Nolan is a reporter for Breitbart News covering free speech and online censorship issues. Follow him on Twitter @LucasNolan or contact by secure email at lucasnolan@protonmail.com




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