December 8, 2022

Netflix sends warning stock decline on subscriber growth

Netflix has warned that subscriber growth will slow significantly in early 2022, with its share of pre-market trading falling 20 percent on Friday in the latest event where investors are dummying shares in companies that thrived during the epidemic.

The streaming company predicts it will add just 2.5 million subscribers in the first three months of this year after the close of trading on Thursday. 4 m added It was 4m in the first quarter of 2021 and below analysts’ expectations.

Shares of Netflix traded lower at $ 402 in pre-market trading on Nasdaq on Friday, down nearly $ 100 from Thursday’s closing price. This fall would wipe out about $ 46bn from the group’s market value. The Nasdaq 100 futures fell about 0.5 percent in European transactions on Friday, while Europe’s Stoxx 600 technology index fell 2.1 percent.

Netflix’s disappointing forecast came after CNBC announced that it would suspend production of its affiliate fitness products, forcing Peloton to expel pre-second quarter earnings to boost investor confidence. Shares of Peloton, one of the biggest beneficiaries of the early Govt-19 lockdowns, fell a quarter following the report.

John Foley, co-founder and CEO of Bellows, said: “Rumors that we will stop production of all bikes and [treadmills] Wrong “but the company” acknowledged that it was accurately measuring our production. . . As we evolve into more seasonal demand curves “. Peloton’s market value has fallen from $ 50bn to less than $ 8bn in the last 12 months.

“Stay at home” stocks that investors overcame at various stages of the epidemic include Netflix and Peloton, and their share prices plummeted amid investor anger over the company’s shares. Benefited from the epidemic.

That’s Blackrock “Virtual Work and Life” ETF, People during the first wave of the virus began to track the progress of companies by spending more time at home, which is traded at a much lower rate. This is down 9 percent from the beginning of the year and less than 40 percent lower than last year’s peak.

Shares of Zoom, a video conferencing service, have fallen more than 11 percent since the beginning of this year. Other epidemiological users, such as e-signature expert DocuSign and Netflix rival Roku, are projected to fall by more than 20 percent by 2022.

Investors are also sour on the technology sector, which the Federal Reserve expects Raise interest rates Controlling rising inflation faster than previously expected. Higher rates reduce the value that investors place on the future profits of fast-growing companies. Technology-based Nasdaq has entered the joint code Correction area This week, it is down more than 10 percent from the November high.

Streaming companies like Netflix and the like Disney Plus 2020 has gained a large number of subscribers during the lockdowns, but as they spend billions of dollars on content to attract and retain visitors, the return to routine practices has hit growth.

Netflix lowered expectations for net new subscribers in the last quarter of 2021, adding 8.3m and 8.4m to 8.7m. This brings the number of paid customers to 222 million.

There has been a slowdown in the growth of Netflix subscribers, including the Korean hit play, even though it has consolidated one of the strongest lists of original content since its launch. Squid game And Do not look up, A film starring Leonardo DiCaprio and Jennifer Lawrence.

Streaming wars lead to larger services spending more on content. Netflix said in the fourth quarter of 2021 that its spending would shrink operating margins by 8 percentage points – down 6 percentage points from the previous year. However, Netflix did not spend as much on content as predicted.

Netflix noted that “competition has intensified in the last 24 months as entertainment companies around the world create their own streaming offer.”

The company acknowledged that increased competition could “affect our growth to some extent”, but said it would continue to grow in every country where its competitors started.