NETFLIX STOCK PLUNGES 20% FOLLOWING DISAPPOINTING EARNINGS REPORT.

By Chandrayee Roy Choudhury, Canada: As earnings season ramps up, Netflix (NFLX) kicked the reporting period off for big tech when it unveiled its fourth quarter results after the bell on Thursday.
The stock was down 11.82% in late trading to $448.15 per share after Netflix's subscriber growth forecast came in below analyst estimates.
Netflix added 8.28 million global paid net subscribers in the last quarter of 2021, beating the 8.13 forecasted by analysts, according to Bloomberg data. Still, shares were weighed down by a disappointing outlook for subscriber growth. The company said it expects to add 2.5 million subscribers in Q1 2022, compared to 3.98 million during the first quarter last year.
The company benefited from the increase in the number of people staying home during the early months of the Covid-19 pandemic, but subscriber growth has slowed recently despite its development of record-breaking original content. Though two-thirds of Netflix’s subscribers watched Squid Game during the company’s third quarter, it only gained 4.4 million net subscribers in that span, and only 70,000 of them came from the U.S. and Canada. Last week, the company increased its subscription fees in those countries.
Netflix shares dropped 20% in after-hours trading Thursday following the release of its fourth-quarter earnings report, which exceeded analysts’ expectations on some counts but continued a trend of declining subscriber growth.