Things went from extremely bad to a whole lot worse for Netflix over the last few days, as their stock continues to plummet following last week's worse than expected quarterly report. Over the last week, the company's stock has tumbled by nearly 20 percent, which has resulted in a $24 billion loss in overall value. Worse still is that things aren't expected to stabilize just yet and shares are expected to fall even further before there is any real turnaround.
According to several reports, Netflix is now on its longest losing streak in five years. The stock price, as of this writing, is at $317.10 per share. This all has to do with the fact that the company missed its quarterly projections, in terms of subscriber growth, by a wide margin. Abroad, Netflix had expected to add 5 million subscribers. Instead, they only added 2.7 million. In the U.S. things were much worse, as the streaming service lost subscribers, to the tune of 126,000. This was blamed on the recent price increase. No matter the reasoning, Wall Street hasn't reacted kindly. A day after the numbers were revealed, Netflix lost $17 billion in value and it's been tumbling downward since.
Several market analysts believe there is a very good chance the stock will dip below $300 per share, with some predicting it will go as low as $275 before things bounce back. So the question becomes, is this a temporary set back? Or is this merely the beginning of the end for Netflix as king of the modern media landscape? While it's impossible to truly predict the future, it's likely a little more from column A, but that's not to say things are going to get easier moving ahead. Quite the opposite.
Disney is getting ready to launch its own streaming service, Disney+, later this year. Meanwhile, WarnerMedia is gearing up to unleash HBO Max, while Apple has Apple+ on the way. Plus, NBC has a streaming service in the works. The market is getting much more crowded and Netflix is already feeling the hurt. Aside from the loss in value, they're losing shows like The Office and Friends, just as a couple of examples, as studios are taking back their most desirable content in order to host that content on their respective services. As such, Netflix isn't going to benefit from Disney titles in the future, as they had been for the past few years, which is another big blow.
Reed Hastings, the founder of Netflix, has also felt the blow. His net worth fell by an eye-popping $850 million as a result of the stock drip, since he owns 2.5 percent of the company's shares. Hastings still has a net worth valued at $3.4 billion, so nobody is shedding any tears for him, but those numbers show just how dramatic this all has been. This news was previously reported by CNBC.