Tech

Netflix loses a quarter of its value as subscriber growth slows

In short: Netflix’s share price plummeted after the video streaming giant released its fourth-quarter earnings report on Thursday afternoon. At the time of writing, the stock is down 24.87% and if it holds until the markets close, Netflix could have its worst day in nearly a decade.

Netflix finished a quarter with 222 million paying subscribers, adding 8.3 million members in the last three months of 2021. Revenue for the quarter was $7.7 billion, up 16.0 percent from the same period a year earlier.

What hurt Netflix the most and why its shares are falling in morning trading is the slowdown.

For all of 2021, Netflix added 18 million subscribers, up from 37 million in 2020. In the first quarter of 2022, the company expects to add 2.5 million additional subscribers, much less than the four million it welcomed in last year’s quarter.

Netflix said its forecast reflects more measured content in the first quarter of 2022. Netflix also acknowledged that competition has intensified over the past 24 months as several entertainment companies have since developed their own streaming offerings.

Just last week, Netflix hiked prices across the board in the US and other regions and said it would use the extra money to continue funding the production of high-quality streaming content. The Standard tier, which lets you watch on two screens and includes HD content, now costs $15.49 per month, up $1.50 from the previous price.

Netflix closed Thursday at $508.25 and is currently trading at $386.48.

Image credit: Dima Solomin


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