The number of Netflix bulls is dwindling
BNN Bloomberg
In a year that has seen widespread selling of technology stocks and long-time market leaders fall into bear territory, the woes of Netflix stand alone.
The video-streaming company has plummeted 69 per cent this year, abandoned by both investors and analysts as back-to-back disappointing quarterly reports raised concerns about user trends in an industry that’s becoming more competitive and losing its pandemic-related tailwinds. The drop is the most of any Nasdaq 100 or S&P 500 component, and much worse than the former index’s 26 per cent decline.
Shares of Netflix gained 0.6 per cent in early trading on Tuesday.
The growth outlook has weakened to the point that Netflix has cut hundreds of jobs and changed its tune on two longstanding principles: it is cracking down on password sharing, and will introduce an ad-based subscriber tier to the platform. That’s on top of a backdrop where high inflation has pushed the Federal Reserve to hike rates sharply, sparking recession fuels and fueling a rotation out of tech.
