Netflix gets hit on Wall Street after disappointing growth figures

Photo: ANP

Netflix dropped significantly on Wall Street on Friday. Investors were unhappy about the disappointing number of new subscribers to the video streaming service. At 8.3 million, that fell short of Netflix’s own expectations. For the current quarter, Netflix itself is counting on an increase of only 2.5 million new users.

The reason for this decrease is increased competition. For example, many consumers now have a choice of streaming services such as Disney+, Apple TV+, Amazon Prime Video and HBO in addition to Netflix, as well as local alternatives. In addition, the strong growth that Netflix experienced during the corona pandemic may now have worn off. Shares of Netflix fell more than 21 percent. Other media companies that do a lot with streaming also fell. Disney was down 5 percent, ViacomCBS lost 2.8 percent and Roku lost 3.5 percent.

Peloton showed recovery and won more than 9 percent. The manufacturer of fitness equipment for home use plunged 24 percent a day earlier. The company would temporarily suspend production of exercise bikes and treadmills, according to business channel CNBC, due to sharply weakened demand. Peloton denied this, but it sharply lowered expectations for 2022. It will also cut jobs to lower costs.

The markets also remained under the spell of interest rate fears. Bond yields are on the rise due to the expectation that the US central bank will raise the key interest rate significantly this year to tackle the rapidly rising inflation. Higher interest rates are bad news for riskier assets like stocks.

Shortly after opening, the Dow-Jones index was 0.1 percent lower at 34,682 points. The broad S&P 500 lost 0.4 percent to 4464 points. The Nasdaq fell 0.5 percent to 14,077 points. The tech gauge thus fell further into the so-called correction area. This means that the index has lost more than 10 percent from its peak in November. For the week, the Nasdaq is trading at a loss of nearly 5 percent. That would be the biggest weekly loss since October 2020.

The euro was worth $1.1356, compared to $1.1337 a day earlier. A barrel of American oil cost 0.9 percent less at $ 84.85. Brent oil fell 1 percent at $87.53 a barrel.