California, April 20 (US): Netflix Inc.
It said it lost 200,000 subscribers in the first quarter, which is far below its expectations of adding 2.5 million subscribers.
The company indicated that the reason for this was the tensions between Russia and Ukraine, which led to the loss of 700,000 members.
Wall Street sent Netflix stock down 26% after the bell rang on Tuesday and wiped out about $40 billion of its stock market value. Since it warned in January of poor subscriber growth, the company has lost nearly half of its value.
Late subscriber growth prompted Netflix to consider offering a lower-priced version of the service with ads, citing the success of similar shows from rivals HBO Max and Disney+.
“Those who have followed Netflix know I have been against the complexity of advertising, and that I am a huge fan of the simplicity of the subscription,” Netflix CEO Reed Hastings said, as reported by Reuters.
“But, as much as I like that, I’m a huge fan of consumer choice.”
Netflix projected a bleak forecast for the spring quarter, predicting it would lose two million subscribers, despite the return of much-anticipated series such as Stranger Things and Ozark and the debut of “The Gray Man” starring Chris Evans and Ryan Gosling. Wall Street targeted $227 million for the second quarter, according to Refinitiv data.
FKN