Reed Hastings

Source: Netflix

Reed Hastings

Netflix stock tumbled more than 35% on Wednesday (April 20) as the company’s market cap declined by $54bn overnight following the streamer’s disappointing first quarter report.

Stock dipped 35.1% to $226.19 by the end of the day in New York – the company’s lowest position since January 2018 – as analysts revised ratings after the streamer said on Tuesday it had lost 200,000 global subscribers.

Netflix has forecast a loss of two million global paid subscribers in the second quarter and co-CEO Reed Hastings said the company was exploring advertising tiers in the next year or two.

The company also announced a focus on cracking down on password sharing and said in addition to its 222 million paying subscribers there were more than 100 million households that share passwords with around 30 million accounts based in North America.

Citing “revenue growth headwinds” caused by inflation, ongoing broadband roll-out across the world, competition from rival streamers, password sharing, the ongoing impact of the pandemic and the suspension of service in Russia, the company is looking to boost several areas.

It wants to improve programming and recommendations by building development and creative excellence and introducing a “double thumbs up” tool for members to express greater admiration for content. It is also exploring diving deeper into video games.

The company still believes that much of its future growth will come from outside the US and continues to maintain a focus on “creative development, personalization, and language presentation/localization”.