Netflix lost a large part of its market value on Wall Street on Wednesday. On Tuesday, after the closing bell, the company announced that it had lost subscribers on balance for the first time since 2011.
In addition, the company expects to lose another 2 million paying customers in the current quarter. The stock lost 31 percent in early trading. Nearly $50 billion in market value evaporated.
Netflix has long indicated that the figures have been distorted in recent years. Due to the corona pandemic, people worldwide stayed at home more, and there was a great need for entertainment. But now, in many countries, people can go to cafes, restaurants and cinemas again, and some are cancelling their Netflix subscriptions. Increased inflation also plays a role.
Overall sentiment on the New York stock exchange floors was positive. The leading Dow Jones index rose 1 percent after trading for a few minutes at 35,257 points. The broad S&P 500 rose 0.5 percent to 4482 points. Partly due to the loss of Netflix, the Nasdaq was slightly above the closing position of a day earlier at 13,633 points. In the wake of Netflix, other streaming service providers such as Roku, Disney and Warner Bros Discovery lost up to 7 percent.
Technology company IBM, which has recently focused increasingly on its cloud activities, is also active with other IT services, gaining 6 percent. As a result, the company expects to meet its growth expectations for this year. However, the withdrawal from Ukraine will be accompanied by a $300 million drop in revenue.
Procter & Gamble (plus 1.4 percent) expects a nearly $3 billion bite from profits this broken fiscal year due to more expensive materials and higher transportation costs. The group behind Pampers diapers, Gillette razors and Ariel soap increased sales in the past quarter thanks to price increases. Profits also rose slightly.
Oil services firm Baker Hughes lost nearly 4 percent. First, the company failed to live up to its expectations last quarter. Then it concerns both profit and turnover that turned out lower than expected. According to the company, this is mainly due to the unrest in recent times.
The price of a barrel of US oil climbed 0.7 percent to USD 103.26, and Brent oil also became 0.7 percent more expensive, at USD 107.97 per barrel. The euro was worth $1.0839 against $1.0792 a day earlier.