21 Jan 2022
Netflix Loses Nearly $45 Billion in Market cap; Failed to Acquire New Subscribers
The Index Today
Netflix expected to add just 2.5 million subscribers for this quarter, a number that falls short of Wall Street’s forecasts and marked as the slowest start to a new year for the popular online streaming company in at least a decade.
According to the released data, shares of Netflix fell as much as 20% to $404.50 in after-hours trading, erasing about $45 billion in market value as investors braced for the prospect that the company is entering a new phase of slower growth. Walt Disney and Roku’s shares also plummeted.
According to the report, Netflix added just 18.2 million customers in 2021, down about 50 per cent from the record year before. It is forecasting that slowdown will continue, at least for another quarter, with the outlook for the current period missing Wall Street’s forecast of 6.26 million new subscribers.
Company executives struggled to identify why the growth has slowed, but right now they are putting the blame on a tough economy, especially in Latin America, as well as lingering fallout from the pandemic.
Chief financial officer Spencer Neumann said on a webcast on Thursday, “It’s tough to pinpoint why [subscriber] acquisition hasn’t recovered to pre-Covid levels.” He and his colleagues reiterated their confidence in the long-term prospects for the business.