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Netflix’s stock price continues to decline, with the company losing 6% this week alone. Yesterday, the stock closed with nearly a 1% loss, and pre-market trading suggests a strong sell-off, indicating the potential for further drops once the market opens.
The current situation for Netflix is even worse compared to other tech companies that have struggled this year. The past two quarters have seen disappointing financial reports that have significantly impacted investor confidence. In response, Netflix has been cutting costs, including laying off more than 450 employees in recent months.
Currently, Netflix’s stock is down 70% from its opening price in 2022. This underperformance has persisted throughout the year, resulting in a 9% drop this month alone. The ongoing decline has caused many investors to question the stock’s viability, with major shareholders selling off their stakes, further driving down prices.
New investors have also been hesitant to buy in due to concerns about Netflix’s growth prospects. Recent reports of the company struggling to retain users have exacerbated its challenges, leading Netflix to reverse some of its longstanding principles, such as introducing an ad-based subscription tier and cracking down on password sharing.
In addition to these internal challenges, the broader economic environment—including inflation and the threat of a recession—has also put Netflix in a difficult position. The rising cost of living has led many subscribers to leave the platform, especially after the company raised its subscription fees.
My analysis of Netflix’s share price suggests that the bearish trend is likely to continue under the current market conditions. We may see the price fall below the recent low of $165, with further declines possible. However, this drop could present a buying opportunity for long-term investors looking to enter the market at a discounted price.