Saxo Group clients have jumped on the streaming giant’s share price falling 26% after trading with the company announcing on Tuesday their first drop in subscribers in 10 years
Investors bought 5,506% (55 times) more Netflix shares in the day following the company’s Q1 results compared to the previous 24 hours.
Netflix announced in this week’s earnings report:- Subscribers were down 200,000 on Q4 last year, expected to drop by two million more in Q2 2022
- Revenue grew 9.8%, down from 16% in the past quarter
- The company faces a battle to reduce password sharing and is considering a cheaper offering for customers, which includes adverts
Peter Garnry, Head of Equity Strategy at Saxo Group, said:
“Netflix has been this unstoppable growth train for over a decade but that ended in Q1 2022 with the video streaming company losing 200K paying subscribers. Even if we factor out the 700K loss from Russia it was a big miss against its own guidance of adding 2.5million.
“In addition, Netflix is guiding a loss of 2million paying subscribers in Q2 vs estimates of +2.5million. The market was spooked sending Netflix shares down 26% in extended trading and to levels 65% below the recent all-time high back in late 2021.
“This suggests that both analysts and the company are having difficulties understanding the post-pandemic demand picture and especially the competitive landscape that is changing with esports and gaming, but also the impact from higher inflation. While some households can substitute into lower priced consumer goods when faced with higher living costs, video streaming services are all priced at the same level and are offering the same product, so substitution doesn’t really happen. Cancellation is more likely the outcome of inflation.”
Netflix -
Percentage change in number trades by global Saxo clients per 24 hours
|
Date |
Buys |
Sells |
|
2022-04-19 |
+18% |
+200% |
|
2022-04-20 |
+5,506% |
+829% |
|
2022-04-21 |
-69% |
-23% |
* Data collected internally on 22/04
All trading carries risk. Any past performance stated is not an indication of future performance.
