Netflix lost $50 billion in value overnight

How badly did Wall Street react to Netflix’s earnings on Thursday, in which the streaming giant was shy about its own subscriber target but forecast slower growth going forward? Well, Netflix’s market capitalization almost lost $50 billion overnight.

Netflix on Thursday said it was close to hitting its self-imposed goal of 222 million subscribers by the end of 2021. But Near the didn’t cut it for investors, who panicked to the point where Netflix’s stock price lost more than $100 of its value overnight. Market capitalization is the total value of all outstanding shares.

For Netflix, this is the worst 24-hour period on the stock market since July 2012, when its stock price plummeted 21.8% since the close of business on Thursday. to Friday.

Much of that drop came from after-hours trading after Netflix’s Q4 earnings, which were slightly below expectations. In pure digital terms, Netflix’s share price lost more than $100 overnight, from $508 a share at the close of business on Thursday, to $400 per share at the close of trading. The exchange opened on Friday, where it fell below $400 to $397.50 by the end of the day. (it continues to fall in after-hours trading).

Investors aren’t just scared off by lower-than-expected results. Netflix is ​​providing lower guidance for the first quarter of 2022, forecasting 2.5 million new subscribers compared with 4 million in the same time frame last year. That would be the worst first quarter in a decade.

Netflix is ​​also the closest to admitting that increasing competition from the likes of Disney and WarnerMedia could impact its growth.

In its shareholder letter, Netflix noted that most of its subscriber growth has come from outside the United States and Canada, which has reached saturation point in recent years. In 2021, almost all Netflix’s growth comes from supervisors. Netflix said: “Our service continues to grow globally, with more than 90% of our additional paid network in 2021 coming from outside of the UCAN region.

Netflix Co-CEO Reed Hastings holding more than 788,000 Netflix shares; Since Monday, that value has fallen by about $95 million. However, don’t feel too bad for him: He’s on the right track to make $34 million this year. Netflix lost $50 billion in value overnight

Curtis Crabtree

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