Netflix loses more than 20% on Wall Street, after disappointing forecasts

For Robert Cantwell, of the investment company Upholdings, the title Netflix “tends to be volatile after a rise in price”. (Photo: 123RF)

New York — Netflix shares opened sharply lower by more than 20% on Friday on the New York Stock Exchange, the day after the publication of historically low growth forecasts for the platform.

Around 10:20 a.m. Quebec time, the stock dropped 24.79% to 382.28 US dollars.

The online subscription video service expects a net gain of 2.5 million subscribers in the first quarter, which would be the most modest growth for the first three months of the year since 2010.

The platform may have gained nearly 55 million subscribers in two years, since the start of the pandemic, and remain growing, investors were no less harshly sanctioned on Friday.

Netflix said on Thursday that “growth in new subscribers (had) not returned to pre-pandemic levels”, a phenomenon that the platform explains by “several factors”, including the resurgence of the coronavirus pandemic.

During the video presentation of the results, company executives downplayed the impact of the emergence of competition on the growth of the subscriber portfolio.

However, according to the firm Parrot Analytics, Netflix’s share of the market for online video services with own content in the world has fallen from 55% to 45% in two years, under the effect of the rise of HBO. Max, Disney+ and Apple TV+.

For Robert Cantwell, of the investment company Upholdings, the title Netflix “tends to be volatile after a rise in price”. The service announced last week that it was raising its rates in the United States.

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At US$15.50 per month for the standard plan, Netflix is ​​now priced higher than all of its major streaming rivals in the US.

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