Netflix stock saw a quarter decline in value on Friday as investors expressed disappointment at the streaming platform’s plans for growth.
Netflix announced late Thursday that it plans to sign up 2.5million new subscribers in its first-quarter 2022. This is lower than the 3.98million subscribers it added last year. According to Wall Street estimates, the first quarter additions could reach 6.9 million.
The shares fell 25% to $380 per share, the lowest price it has been since April 2020. Netflix stock lost almost 16% year-to-date, Thursday’s lowest price since April 2020. This was in addition to a wider selloff of tech stocks that have dragged the Nasdaq composite into a correction.
According to a transcript, CFO Spencer Neumann stated that it was difficult to pinpoint the reason why our acquisition has not returned to pre-COVID levels. It’s likely that there’s an overall COVID excess that’s still occurring after two years of a pandemic in the world. This is a result of some macroeconomic strains in certain parts of the globe, such as Latin America.
The company stated that its first-quarter subscriber guidance was based on a “more back end weighted content slate”, with “Bridgerton”, a period drama, and “The Adam Project,” both set to launch in March.
Per-share earnings of $1.33 exceeded analysts’ expectations by 83 cents per share, according to a FactSet survey. The company’s 2021 hits included “Squid Game” from South Korea. Its revenue was $7.71 billion which was consistent with Wall Street’s consensus forecast.
Netflix added a more-than-anticipated 8.28 million subscribers in the fourth quarter.
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