(CMR) Less than 24 hours after it reported losing over 200,000 subscribers for the first quarter of 2022 on Tuesday, Netflix lost over $50 billion in value.
Netflix's stock dropped 35% on Wednesday, instantly wiping $50 billion off the value of the company.
Netflix () now has 221.6 million subscribers globally but expects to lose another two million in the second quarter of 2022. The streaming service was expected to add 2.5 million subscribers in the first three months of the year.
However, The prevalence of people working from home and using streaming platforms far more during the pandemic ‘obscured the picture until recently' for the streaming service.
In a note to its shareholders, Netflix wrote: “Our revenue growth has slowed considerably as our results and forecast below show. Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally.
“However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
“Sharing likely helped fuel our growth by getting more people using and enjoying Netflix. And we've always tried to make sharing within a member's household easy, with features like profiles and multiple streams,” the company said.
“While these have been very popular, they've created confusion about when and how Netflix can be shared with other households,” Netflix added.
Netflix intends to clamp down on password sharing as it tries to boost profitability. The company is also considering including advertisements on the platform.