20th April was a terrible day for Netflix’s investors as the share tumbled 37% in a single day.
The share opened 30% below its last close and proceeded to fall a further 7% as a selling frenzy overtook the stock, making it touch price levels the company hadn’t touched since 2018.
A major cause of such decline was the departure of around 200,000 subscribers in the first 3 months of 2022 as per the company. Other causes were rising inflation, geopolitical tensions and fierce competition faced by the platform.
Moreover, Netflix has told it’s investors that around 2 million more subscribers could leave the platform by the month of July!
To tackle this, Netflix is breaking down on the issue of password sharing. It estimates around 100 million households are breaking it’s rules relating to password sharing. Furthermore, the platform is also considering an ad-supported plan which would be significantly cheaper.
Competitors of the company have already launched such a version of their platforms and Netflix is late to the party. Adding on, the company has also implemented an additional charge for adding new viewers to accounts.
The share closed at $226.19.
Highlight by Aman Agarwal.