Netflix Loses $54 Billion In 24 Hours
Who'd have thought that raising your prices and trying to stop password sharing would lead to your company crumbling before your eyes? Ah Netflix, you had it so good for so long. The streaming giant has dominated the scene since it first offered this option in 2007, and these days, it's hard to remember the time we used to get DVDs posted through our letterboxes.
Despite its massive growth over the past couple of years, Netflix reported that it haemorrhaged 200,000 subscribers during the first quarter of 2022. With more competition on the market and Netflix pulling our Russia turning figures on their head, Netflix was already in a wobbly position. Then, it went and shafted us all.
What's Going On With Netflix?
It's no coincidence that just days after Netflix unveiled plans to stop password sharing between households, we've seen a dive in its market value. Despite Netflix originally projecting growth of 2.5 million subscribers in the first quarter of 2022, it's bleeding customers. Worse than this, it's wiped $54 billion off its price in less than 24 hours.
The $54 billion loss is one of the biggest single-day drops in stock market history. It saw $NFLX dip throughout the day and lose 35 points to close at just $226.19 per share. At least nine Wall Street firms downgraded Netflix stock, which is a devastating blow for the seemingly thriving company.
Speaking during a Q1 investor's call, Netflix CEO Reed Hastings said, "I know it's disappointing for investors, and it is for sure. "But internally, we're really geared up, and this is like our moment to shine. This is when it all matters. And we're super focused on achieving those objectives and getting back into our investors' good graces." So, what does this mean for the company and its grand plans to push into gaming?
Can Netflix Recover?
Things are presumably going to get worse as investors start to panic about the latest news. On April 20, American investor William Ackman dropped his $1.1bn investment with a loss of over $400m. This is the first time in a decade that Netflix has lost subscribers, but given the recent upheavals, someone should've seen it coming. With COVID restrictions easing, more and more people are seeking alternative entertainment now they aren't locked in their homes.
Of course, we're still a long way from Netflix going bust. The platform is a titan of TV and movies, which also hold the honour of being the world's first high-profile streaming service to be nominated for an Academy Award - take that Martin Scorsese. Alongside a continued slate of shows and movies like the upcoming third season of The Witcher, you also have a BioShock movie (to name just two). Even if the bubble hasn't burst, it's definitely deflated. Still, expect to see Netflix rise from the deep like a BioShock bathysphere.