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Netflix stock (NFLX) drops by 25% after reporting losing 200,000 subscribers

On Tuesday, after reporting losing 200,000 subscribers in Q1 2022, streaming site Netflix stock (NFLX) dropped by nearly 25% in after-hours trading.

Netflix’s first-quarter report for 2022 missed a lot of expectations that caused worry among its investors. The company had forecast an additional 2.5 million subscribers at the end of the period, but instead, it suffered a drop.

According to a CNN report, this is the first time that Netflix is losing this many subscribers in over a decade. However, the company seems to have been on a downward trend of late. From 2021 until the end of 2022’s first quarter, Netflix stock decreased by about 40%.

The streaming platform explained to investors that the pandemic had ‘clouded the picture’ because it significantly increased its growth. Something it cannot sustain as the COVID-19 era is now coming to an end, causing its growth to slow down.

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In addition, Netflix complained that despite having 222 million paying household customers, more than 100 million more share passwords. Also, it mentioned other factors like inflation, the Russian invasion of Ukraine, and more.

With Netflix stock plummeting, the company has vowed to take decisive action to revive it. One of what it plans to do is improve its programming and recommendations service. Another is to find a way to make money from password sharing among family and friends.

Surprisingly, Netflix CEO Reed Hastings also confirmed that the streaming platform might start considering ad revenue in the future.

“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, and allowing consumers who like to have a lower price, and are advertising tolerant, get what they want makes a lot of sense,” Hastings told analysts.

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Onwuasoanya Obinna

A reader of books and stringer of words. Passionate about Science and Tech. When not writing or reading he is surfing the web and Tweeting.