Netflix Drops $16 Billion in Value After First US Subscriber Loss in Eight Years
Netflix shares plummet as the streaming giant experiences its first domestic paid subscriber loss since 2011. The company misses global growth expectations despite beating quarterly earnings estimates.
Netflix shares fall 10.3% as the company loses more than $16 billion in market value following a disappointing second-quarter report. The drop occurs after the streaming giant reports a loss in domestic paid subscribers for the first time in eight years. Despite beating earnings per share estimates with 60 cents and narrowly missing revenue expectations, the subscriber numbers shock investors.
The company blames regional price increases, a weak content slate, and a pull-forward effect from a strong first quarter for the decline. Netflix loses US subscribers for the first time since 2011, echoing a previous customer backlash over pricing. International paid subscriber growth also falls significantly short of expectations, adding only 2.83 million users compared to the estimated 4.81 million.
Netflix remains optimistic about the upcoming third quarter and forecasts 7 million paid net adds along with $5.25 billion in revenue. The company predicts that highly anticipated new seasons of popular shows like "Stranger Things," "The Crown," and "Orange is the New Black" help buoy future subscriber growth.