Netflix’s stock share plunge may send chills through shareholders’ spines after the streaming service reported its first subscriber decline in more than a decade.
Share prices dropped more than 30% on Wednesday morning, a drop reflective of some investors’ concerns regarding the brand’s growth as a streaming service as the COVID-19 restrictions that kept people largely confined to their homes begin to loosen.
That drop in stock led to the company losing more than $50 billion in market value, according to Deadline. If the stock dip holds for this session, it will be Netflix’s biggest daily share decline in over a decade, according to the Wall Street Journal.
‘WOKE MIND VIRUS’: MUSK DIAGNOSES NETFLIX’S HISTORIC LOSS IN SUBSCRIBERS
The loss of 200,000 subscribers can be attributed to several variables, including inflation, the competitive market of streaming services, and a slow decline in COVID-19 restrictions, according to executives. Netflix CEO Reed Hastings told investors that the pandemic “created a lot of noise,” making it difficult to determine whether the changes in subscription numbers reflect national trends.
Netflix’s loss in subscribers could also be attributed to the company’s decision to withdraw its service from Russia to protest the country’s invasion of Ukraine or to the increase in unauthorized password-sharing, a practice Netflix hopes to stop by implementing a new feature to confirm users live in the same household.
Others had different theories for the decrease, with Tesla CEO Elon Musk suggesting the decline in subscribers is due to the “woke mind virus” making the streaming service “unwatchable.”
The subscriber decline is the first reported dip by the streaming company since October 2011. Netflix forecasted that the decline would continue and expects to lose 2 million subscribers in the current quarter.
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Hastings is interested in offering a cheaper Netflix plan that is ad-supported, he told investors.
“Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription,” Hastings said. “But, as much as I’m a fan of that, I’m a bigger fan of consumer choice.”
