Reed Hastings, co-chief executive, said tackling account sharing is now a priority for the company. Shares of Netflix rose 86% from the end of 2019 through 2021, while the S&P 500 climbed 48%. “They picked up a tremendous amount of subscribers because people were stuck in their homes but now they’ve reached a certain saturation, and they’re dealing with some real competition.” “This is not the end of Netflix, but it’s going to require re-tooling perhaps with video games and other sources of future growth,” says Eric Schiffer of the Los Angeles-based private equity firm, The Patriarch Organization. Netflix, like Peloton and GameStop, was a beneficiary of cash that flushed through economies during the pandemic, feeding demand for stocks. Wednesday’s crash comes after a period of spectacular growth for the company coupled with investors demand for the stock. “The woke mind virus is making Netflix unwatchable,” Musk tweeted. The confluence of negative forces, from the lifting of the pandemic, the loss of 700,000 subscribers in Russia, high consumer inflation in many leading markets forcing households to rethink their budgets, have hit the service.Įlon Musk, the Tesla CEO currently making a hostile takeover bid for Twitter, claimed “woke mind virus” is behind Netflix’s stock plunge – not competition, password crackdowns or an inflation squeeze. In terms of capitalization, Netflix is now worth $1009bn, a figure that will make it more difficult for its Los Gatos, California-based management to raise money to fund the investment for content production upon which subscriber growth has been dependent. “We’re definitely feeling higher levels of market penetration … and heightened competition,” said Ted Sarandos, co-chief executive. It recently raised subscription prices despite signs that consumer growth was slowing, with a basic monthly package now costing US customers $15.49. The company said on Tuesday that it had experienced “revenue growth headwinds”. Netflix stock, which was already down 40% for the year, has now dropped from $700 in November to $244 when the market opened, a fall approaching two-thirds. A number of rival services, including Disney, Warner Bros Discovery and Paramount, often with deeper content libraries to draw on, have also entered the market.
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