Why Netflix Shares Crashed on the Stock Market

Netflix presented its results last Tuesday and the market turned its back.

The shares of the streaming service registered an unusual punishment to the large technology companies of Wall Street, which are grouped under the acronym of FAANG -Facebook, Amazon, Apple, Netflix and Google -.

The company fell more than one 11% with a minimum price of US $ 489, 28 by title, deleting 25. 000 millions of dollars of the market value of the company.

Approximately 3, 98 millions of people signed up for the service and between January and March of this year compared to the 6 million expected.

The company said that the lack of new shows may have contributed to this, adding that he hopes to recover as new seasons of his most successful shows come out.

A double-edged sword

Netflix got a big boost from the pandemic last year, as the demand for movies and television skyrocketed.

The service added 15, 8 million new subscribers in 2020, when the covid – 19 forced people from all over the world to stay at home.

Much of that growth occurred in Asia, where Netflix added 9.3 million to its customer base that year, an increase of about 65% compared to the previous year.

• Will you continue on 2020 How successful was Netflix during the pandemic?

But the pandemic has proven to be a double weapon edge for Netflix, because also caused stoppages in its own productions division .

“These dynamics are also contributing to the fact that in the first half of 2021 let’s have a lighter content screen and therefore we believe that the growth of subscriptions will be slower, ”the company said in its quarterly letter to shareholders.

The company projected low customer growth going forward, with 1 million new subscribers for the second quarter, well below the 5 million previously anticipated.

Netflix is ​​also facing increasingly stiff competition from new streaming services entering the market.

Disney +, a much newer streaming service, you already have 98 million subscribers, compared to 207, 6 million Netflix.

But even with slow customer growth, Netflix reported revenue of $ 7. 160 million and a net profit from US $ 1. 710 million.

Netflix predicted stronger growth in the second half of the year when it released new seasons of “You”, “La Casa de Papel”, “The Witcher” and the action movie “Red Notice”, among other titles.

“We had ten years in which we were growing constantly and easy , “Netflix CEO Reed Hastings said in a call to discuss the company’s results, according to the AFP agency.

“Right now it’s a bit unstable.”

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