$50 billion, yes that’s right, $50 billion has been wiped off the Netflix market cap in a single day after sharing reports of its first loss of subscribers in 10 years.
The popular streaming service had a loss of 200,000 subscribers compared to last quarter, with even bigger losses anticipated, around 2 million projected for the second quarter.
They may be still the biggest home entertainment service but their market dominance has been weakened by the likes of Amazon Prime, Disney+ and NowTV to name a few. Their recent price increase, account sharing crackdown and Russian sanctions have played their part also.
Due to this, its shares have plummeted by 35% making it the worst-performing S&P 500 stock this year.
One reputable American financier, William Ackman sold his £840m ($1.1b) investment in Netflix, taking a loss of over £300m ($400m).
In a broadcast to its shareholders, the company shared, “Our revenue growth has slowed considerably as our results and forecast below show. Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally.
“However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
“While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetisation of multi-household sharing – we’ll be holding our operating margin at around 20 percent.
“Key to our success has been our ability to create amazing entertainment from all around the world, present it in highly personalised ways, and win more viewing than our competitors.
“These are Netflix’s core strengths and competitive advantages. Together with our strong profitability, we believe we have the foundation from which we can both significantly improve, and better monetise, our service longer term.”
Nobody is certain how they will crack down on password sharing, it will be a difficult task as the platforms allow multiple users to create profiles.
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