Shares of Netflix are down today because reported subscriber numbers didn’t increase fast enough for the Wall Street analysts covering the streaming video company. It’s hard to imagine how Wall Street could have been so surprised at a slowdown in Netflix growth, given the number of competitors coming into the market. Tim Bradshaw reports:
Until the abrupt reversal in fortunes, Netflix stock had more than doubled in value so far this year including having added more than $40bn in market capitalisation since April’s forecast-busting results.
The latest miss on subscribers is its biggest disappointment in two years, and it sent its stock tumbling by as much as 14 per cent in after-hours trading. Investors wiped more than $20bn from its valuation in a matter of minutes as they fretted that the past year’s growth spurt might be running out of steam.
Netflix’s outlook for the third quarter was also more conservative than Wall Street had expected. It predicted 135.1m members at the end of September. Its forecast of 5m global net subscriber additions this quarter was below the 5.3m it added in the same quarter a year ago.
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