Actions Netflix It lost more than a third of its value on Tuesday after announcing its first drop in subscribers in a decade, prompting Wall Street to question its growth amid fierce competition and spectator fatigue following the pandemic.

After the first negotiations on Wall Street, streaming shares became a pioneer Fell 35% to $ 223 and If the losses continued, they would be heading for the worst day in a decade. At least a dozen analysts have been quick to point out their views on the rally, which has been a featured performer in recent years.

“Netflix is ​​an example of what happens to growing companies when they lose growth,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh. “People are buying up growing companies because they think their cash flow will increase, so they pay for what they expect in advance. When similar stocks fall, growth-seeking people quickly fold.“.

The stock drop could erase profits from the past two years as its business flourished as new customers joined its platform to lock in the weather.

Netflix had planned to add 2.5 million users during the period under review – and analysts expected even more – but instead lost subscribers to a total of 221.64 million viewers.

“The suspension of our service in Russia and the gradual decrease in the number of Russian paid subscribers led to a net loss of 700,000 subscriptions.. “Without this impact, we would have an additional 500,000 subscribers in the last quarter of 2021,” the company said in a statement.

The firm recorded $ 7.9 billion in the first quarter of the year, up 10% from the same period a year earlier, thanks to a 12-month increase in subscriber numbers (+ 6.7%) and tariff increases. .

To calm the nerves, Netflix executives told analysts on Tuesday that they were looking to offer an ad-supported service within the next year or two and vowed to stop sharing the password.Long service problem.

Netflix competitors already have ad-supported versions or are considering one thing: HBO Max offers an ad-supported subscription, while Disney + recently announced that it will launch an ad-supported service.

There is also growing demand for new, attractive content, forcing Netflix and others to consider larger production budgets while costs are rising in an inflationary environment.

“Netflix profitability or business model is not a problem, as the numbers show, some users may unsubscribe due to inflation and post-pandemic user fatigue.Said Peter Garrison, Saxo Bank’s Capital Strategy Officer.

Broker JP Morgan was the most aggressive, halving its price to $ 305, well below Wall Street’s average target of $ 400. “Short-term visibility is limited … and there’s not much surprising in the coming months beyond the new, much lower stock price,” said Doug Anmuth, an analyst at JP Morgan.

Anmuth also halved the number of net subscribers to 8 million in 2022.

For the second quarter, Netflix has prepared new seasons of the popular series “Ozark”, “Strange Thing” and “Grace and Frank”.

However, Nedham took a different view. The broker improved its stock rating to “hold” from “inability” due to the company’s plans to add a low-priced ad-supported service.

(According to Reuters and AFP)

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