Netflix -25% Pre-Market
Shares in US streaming giant Netflix are trading down by around 25% ahead of the US open today. Sentiment turned heavily bearish for Netflix in response to its Q1 earnings release yesterday which saw the platform reporting its first net-loss in subscribers for a decade. Netflix had offered guidance for subscriber growth of around 2.5 million in Q1. However, in stark contrast, the platform reported a net-loss of 200,000 subscribers.
In terms of explaining the loss, the company pointed to large scale cancellations as consumers fight with rising living costs, including families and friends sharing accounts. Netflix also pointed to a change in user habits as the world transitions out of the pandemic, as well as a roughly 700,000 loss as a result of the Russia-Ukraine war.
Netflix also pointed to the rise in market share of its competitors, such as Amazon Prime and Disney Plus, Apple TV and others, which contributed to the group missing revenue targets in Q1. Looking ahead, there are fears that the current slump might be the start of a broader decline as competitors continue to grow in size and consumers continue to battle rising living costs, leading to further subscription cancellations.
Technical Views
Netflix
Including pre-market losses, Netflix shares are now downy by around 60% from last years all time highs. Price has been moving in a well-defined bear channel and has now taken out the longer-term rising trend line. With MACD and RSI bearish here, the focus is on further downside while price remains below the 352.91 level which bulls will need to break to alleviate near term bearishness.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.