Netflix shares sink more that 30%, deepening selloff after subscriber loss

Netflix lost more than a third of its value Wednesday after reporting its first subscriber loss in more than a decade and predicting more grim times ahead.

Netflix Inc lost more than a third of its value Wednesday after reporting its first subscriber loss in more than a decade and predicting more grim times ahead.

The technology giant slumped 34 per cent. The company suffered its first subscriber loss in more than a decade and expects a steeper decline during the current quarter. It is also considering changes that it has long resisted, including minimizing password sharing and creating a low-cost subscription supported by advertising.

“Netflix is a poster child for what happens to growth companies when they lose their growth,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

“People buy growth companies because they think their cash flow is going to grow so they’re paying ahead for anticipating that. When a stock like this tumbles, people looking for growthback away quickly.”

Brokerage J.P.Morgan made the most aggressive move by halving its price target to $305 – well below the stock’s median Wall Street target of $400.

“Near-term visibility is limited … and there’s not much to get excited about over the next few months beyond the new, much lower stock price,” J.P. Morgan analyst Doug Anmuth said.

Anmuth also slashed his estimate for 2022 net subscriber additions by half to 8 million.

The share slump could erase the stock’s gain over the past two years, when its business thrived as new customers joined its platform to ride out the lockdowns.