Netflix saw its stock tank 25 percent after it reported losing 200,000 subscribers in the company’s first quarter – the sharpest decline in a decade.
“The company’s shares cratered more than 25% in extended hours after the report on more than a full day’s worth of trading volume,” reported CNBC. “Fellow streaming stocks Roku, Spotify and Disney also tumbled in the after-hours market after Netflix’s brutal update.”
$NFLX -25% pic.twitter.com/ChqjpC0Qxr
— Joe Weisenthal (@TheStalwart) April 19, 2022
With the closing of the second quarter, Netflix is projected to lose 2 million global subscribers. In a letter to shareholders on Tuesday, the company said the company’s content still remains popular but faces stiff competition. It also cited the company cutting off its paid 700,000 membership in Russia for a sharp drop in global subscribers.
Netflix Co-CEO Reed Hastings said the platform may shift to offering “lower-priced, ad-supported tiers as a means to bring in new subscribers after years of resisting advertisements on the platform.”
“Our revenue growth has slowed considerably,” the company wrote. “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.”
That admission comes after it reportedly told shareholders the company’s subscriber base would grow by 2.5 million in the first quarter, with analysts predicting it closer to 2.7 million. The situation has become so dire that Netflix Co-CEO Reed Hastings said the platform may shift to offering “lower-priced, ad-supported tiers as a means to bring in new subscribers after years of resisting advertisements on the platform.”