Netflix stock plunges after subscriber losses
On Tuesday, after Netflix revealed its quarterly results, which indicated that the industry leader had lost subscribers for the first time in more than a decade, the stock prices of streaming video businesses dropped.
Roku shares plunged 6% after hours after jumping almost 8% during regular trading, while Disney shares dipped as much as 5%. The owner of HBO Max, Warner Bros. Discovery, was down approximately 4%, and Paramount (previously ViacomCBS) was down nearly 6%.
Investors are concerned about a possible slowdown in consumer spending as a result of this report.
After reporting a loss of 200,000 subscribers in the most recent quarter and predicting a loss of 2 million subscribers in the second quarter, Netflix dropped more than 25 percent in extended trading on Tuesday.
Also on Tuesday, the video streaming service cautioned that it may begin to restrict password sharing, which might lead to an increase in paid subscribers. In the early stages of Netflix’s growth, the company permitted its 222 million customers to share their account information with friends and family, but now it wants all users to pay for their service. An estimated 100 million people were using someone else’s login to view Netflix.
The pandemic had a big impact on Netflix and other streaming providers, as people spent more time and money watching material from the comfort of their own homes.
As the economy begins to recover in the United States, it’s almost as if the pandemic never occurred—at least in terms of Netflix’s stock’s relative weakness.
As of Tuesday, the stock market has fallen to its lowest point since November of last year. At this point, the stock is down more than 40% from its peak in November 2021 and more than 60% from its current price.