Netflix Loses $40 Billion After Russia Exit
Video streaming-related stocks have suffered losses as of late, with Roku down nearly 6%, Walt Disney down 5%, and Warner Bros Discovery down 3.5 percent. But by far the most notable among them is Netflix, who lost $40 billion after the Russia exit.
After the firm disclosed their first customer decrease in more than a decade, Netflix’s stock plummeted 37 percent in early trade on Wednesday, resulting in a staggering $40 billion market capitalization loss.
The number of customers declined by 200,000 in the first quarter, dropping far short of the company’s forecast of 2.5 million new subscribers. In Russia, the service was suspended due to the Ukraine situation, which resulted in the loss of 700,000 customers.
Following months of prosperity during stringent pandemic-related lockdowns, the streaming platform’s fortunes have suddenly changed. Since January, when the company cautioned of slowing subscriber growth, Netflix’s stock has lost over half of its value.
Besides the pullout from Russia, the firm expects even more losses in the future, as inflation and tough competitiveness contributes to a significant drop in the number of consumers. The streaming service expects to lose two million customers in the spring quarter.
To address weak subscriber growth, Netflix is allegedly considering launching a lower-cost version of the service with advertising. HBO Max and Disney+ have also had success with similar offers.
According to Reuters, Netflix CEO Reed Hastings remarked, “those who have followed Netflix know that I’ve been against the complexity of advertising, and a big fan of the simplicity of subscription.” “But, as much as I’m a fan of that, I’m a bigger fan of consumer choice.”
Other video streaming-related stocks have also suffered losses, with Roku down nearly 6%, Walt Disney down 5%, and Warner Bros Discovery down 3.5 percent.
- Source : GreatGameIndia
