Netflix Stock Plummeting Again After Damning Report

By Dan Lawrence | 3 weeks ago

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Wind the clock back to the beginning of the world-altering pandemic and Netflix looked like it was set to turn the dial of dominance up to eleven. The forefather of the streaming surge, Netflix has since hit a snag post-pandemic. The Hollywood Reporter writes that Netflix stock is now plummeting amid a variety of worrying factors.

The downturn in fortunes in the stock market for Netflix came following Goldman Sachs downgrading their shares in the streaming service from ‘neutral’ to ‘sell.’ The move from Sachs came on Friday and triggered a near 5% drop in Netflix share prices. Goldman Sachs marked a feared consumer recession along with heightened levels of competition as reasons behind their damning switch from ‘neutral’ to ‘sell.’

The drop in share prices marks another sorry story for Netflix in what has been a difficult 2022 thus far. Early this year, Netflix announced a disastrous loss of 200,000 subscribers in the first quarter of 2022, and in January experienced one instance of a single-day plummet in share prices of over 20%. These are certainly worrying times for Netflix and at one time would have appeared completely unprecedented.

It is true that competition for Netflix has grown in recent years. Joining the likes of Netflix’s long-time nemesis Amazon Prime are big players in the industry, from HBO Max and Disney + as well as AppleTV, Paramount+, and many more. Here in lies part of the problem that Netflix has faced, with the streaming market not only being saturated, but the likes of Disney+ and HBO Max being able to fall back on an extensive back-catalog of industry-leading content and major franchises, from DC Comics for HBO to Star Wars and Marvel for Disney. Couple major competition with an impending ‘consumer recession,’ and Netflix’s drop in share price appears all the clearer.

It is not all doom and gloom at Netflix however, as the streaming giant has a few potentially exciting tricks up its sleeve. One such move is a rumored acquisition of Roku, the company that produces a variety of streaming devices, as well as being a major player in ad-supported services. If Netflix were to acquire Roku, it would allow them to launch their own streaming stick and potentially expand to producing their own television sets as well. More importantly, it would help support them to launch ad-based streaming on its service, a move that is planned for later this year.

In addition to the rumored move to buy Roku and the plan to introduce ads, Netflix is also in the conversation to acquire live-sports content. SportsProMedia reports that Netflix is one of a number of potential suitors to acquire live-broadcasting rights in America for Formula 1 from 2023 onwards. The platform already has a relationship with the international motor racing series, having produced four series of the popular Formula 1 behind-the-scenes documentary Drive to Survive. However, should Netflix succeed in acquiring the rights to broadcast the Formula 1 Grands Prix from 2023 onward, it would be the first time the streamer has produced live-sports content. The present moment is a worrying one for Netflix given its stock market situation, but if it were to succeed in launching ads, buying Roku, and broadcasting Formula 1, things could start to look up for the once-dominant streaming giant.