News
Netflix tumbles as investors abandon “at home” stocks
Netflix finds itself in Wall Street’s hot seat as markets reassess the diminishing growth prospects of so-called “pandemic stocks.”
It was the darling of Wall Street, as millions switched from the office to home, and chucked Netflix on the TV for background noise between zooms.
But now the streaming video service lost some $US40bn in market capitalisation after releasing results Thursday night that projected growth of just 2.5m subscribers in the first quarter.
That’t the slowest rate of expansion in over ten years, and a big change from the 55 million extra subscribers who signed up over recent years.
Netflix shares finished 21.8 per cent lower, a similar level to that experienced Thursday by Peloton, which recovered some of its losses.
And Just Like That
Such sell-offs are a particularly brutal manifestation of a market dynamic that’s been going on for months in stay-at-home equities, whose investment thesis has worsened with the lessening risk of pandemic-caused lockdowns.
Just ask Peloton, which was hit by not just gyms reopening, but a major disaster for its brand played out on the new streamed show, And Just Like That.
In a memo to staff late Thursday, Peloton Chief Executive John Foley said, “rumors that we are halting all production of bikes and treads are false.” But Foley said the company was “resetting our production levels for sustainable growth.”
