The crypto market seemed good on Tuesday in contrast to Netflix (NFLX). The shares of Netflix dropped 27% to $255 in after-hours trading. It reached 2019 levels in the first quarter of 2022, following an announcement of a massive decrease of 200K subscribers. This move gave an estimated loss of $40 billion in just half an hour.
It marked the first time Netflix lost subscribers since 2011. However, experts believe the company could experience 2 million more in the loss in the 2nd quarter of 2022. Keep in mind that Netflix (NFLX) is already 63% down from its higher 40%. Brian Chiappetta of Bloomberg said it is a reminder that $FB is continuously down at 33%.
Bloomberg Reported a Horrible Situation
The move came after the company disclosed a downfall in Facebook’s user growth. An analyst for Moffett Nathanson LLC, Michael Nathanson informed Bloomberg that it was just horrible and disgraceful. He added that everything is given up in one quarter as they tried to convince and attract people.
Bloomberg also reported that Disney subscribers dropped around 5.2% in lengthy trading after Netflix reported its viewpoint. However, Discover Inc., Warner Bros., and HBO Max also dropped at least 2.8%. The shares of Roku Inc. (Maker of set-top boxes for streaming) also showed a downfall of around 8.3%.
Netflix Experienced a Sharp Drop in the 1st Quarter
Most people were still wondering if this could push down the crypto market. Multiple economists have pointed out there was a sharp dump last time happened for Netflix on 22nd January 2022. The shed marked a 4-day crash with 30% across crypto. They also added that they don’t think the current issue is similar to the above-mentioned attempt.
The previous issue was significantly related to macroeconomics and it was the reason why the economists refused to repeat it. Moreover, the general stock market bidding is experiencing agitation after the interest rates increased in the United States. The indicators are currently showing a declining demand for the company.
100 Million People Still Using the Netflix Service for Free
The company acknowledged in January that the competition is critically disrupting marginal growth. However, the bad performance in the first quarter happened due to various critical reasons. One of the reasons is that a massive number of customers share their passwords and facilitate others. More than 100 million households are using the Netflix service technically free of cost.
The economic experts also pointed out macro factors including slow economic growth, inflation increase, and the geopolitical situation. They also pointed out that the Russian invasion of Ukraine and continuous Covid-19 interruption had an impact. However, Netflix entirely lost its forecast for a supposed growth of 2.5 million to its subscribers.
Netflix Experienced 1st Major Drop on January 27
The company also claimed that many users again joined the platform in the 1st quarter of 2022. Meanwhile, the anti-crypto propaganda calls it “too risky and too volatile”. It claimed that most investors want protection and look weak. The first major Netflix drop of the year happened on the 27th of January. A report confirmed that the cover fund of Bill Ackman purchased around 3.1 million Netflix shares.
The 2nd major thing that distances with crypto show the industry normally calls a fraud scheme. But various analysts believe that the current NFLX condition provides a clear sign of inner trading. A Twitter account (Unusual Whales) pointed out that $NFLX with $300 put was the most attractive entry before closing. It clearly indicated that most traders with put options supposedly earned a lot of money.