Streaming Stocks Plunge After Netflix Loses Subscribers

Netflix stock dropped dramatically on Wednesday after the streaming service reported a plunge in subscribers in the most recent quarter. The company reported a loss of over 200,000 subscribers in the first three months of the year; worse, it anticipates losing another two million over the next quarter.

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The news comes as a shock, as Wall Street reportedly expected the company to tack on 2.5 million subscribers and experience future growth… not lose them by the hundreds of thousands. In light of the report, Netflix stock plummeted 35 percent, losing $55 billion in market capitalization—and it was already down 40 percent for the year.

“Nobody was expecting Netflix to announce they lost subscribers. They were expecting a slowdown in subscriptions, but seeing Netflix losing subscribers is a big deal,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, an online broker, told the Wall Street Journal.

Netflix shares climbed an astounding 86 percent from the end of 2019 through 2021, as the company rode the pandemic lockdown wave and the S&P 500 climbed 48 percent. Netflix stock reached $602, but it closed at just above $226 on Wednesday.

Other similar services followed suit, including Disney, which was down about five percent after markets opened on Wednesday; Roku, which was down more than seven percent; Paramount, which dipped 11.7 percent; and Warner Bros. Discover, which slumped about five percent.

This is not the first time that the streaming company shared disappointing data. Rather, this is Netflix’s second consecutive set of data indicating poor performance. In January, the streaming giant admitted that subscriber growth was slowing down, and investors cleared nearly $45 billion from the company’s value then.

Some users fear that Netflix prices will go up to compensate for fewer subscribers and the biggest single-day loss of value in the company’s history. Already, the company announced that it’s testing a new subscription service model—monetizing password sharing—in some Latin American countries.

Investors are watching and waiting to see how the company pulls itself up by the bootstraps and, in the meantime, looking for ways to pull their portfolios out of the weeds, too.

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