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Netflix's Subscriber Growth Chills
Shares of Netflix (Nasdaq: NFL) plunged 20.22% in after-hours trading on Thursday after the streaming giant posted disappointing guidance with its quarterly earnings.
Financials: Earnings per share for Netflix reached $1.33 in the quarter and revenue hit $7.71 billion; both were better than expected.
Poor Guidance: While the financials in the fourth quarter of 2021 were good, the real problem is Netflix’s subscription guidance for the first quarter of 2022. Analysts expected Netflix to forecast 6.9 million paid net additions, but the company says it will only add 2.5 million.
Pandemic: Netflix attributed its problems to "the ongoing Covid overhang” and “macro-economic hardship in several parts of the world like LATAM.”
Stiff Competition: The real challenge for Netflix is the competition. The company wrote in its earnings that competition from new streaming companies “has only intensified over the last 24 months” and “this added competition may be affecting our marginal growth.”
Bigger Picture: Shares of other streaming rivals also plummeted in after-hours trading on Thursday. Shares of Disney (NYSE: DIS) dropped 3.30% and Roku (Nasdaq: ROKU) fell 4.40%.
Optimism: Despite these challenges, Netflix added 1.2 million subscribers in the quarter in the United States and Canada, which was its largest increase in the region in two years. Netflix also recently announced that it is raising subscription prices in the U.S., which will increase revenue.
Final Thoughts: Investors may want to buy Netflix because the stock price is lower, but can Netflix jumpstart its subscriber growth again?
Notable Earnings Today: Schlumberger (NYSE: SLB), Ally Financial (NYSE: ALLY), Huntington Bancshares (Nasdaq: HBAN), IHS Markit (NYSE: INFO), First Hawaiian (Nasdaq: FHB), Metropolitan Bank Holding Corp. (NYSE: MCB).
Notable IPOs Today: PROOF Acquisition Corp I (NYSE: PACI), Samsara Vision, Inc (Nasdaq: SMSA), TLGY Acquisition Corporation Class A Ordinary Share (Nasdaq: TLGY), Inception Growth Acquisition Limited Common Stock (Nasdaq: IGTA), Welsbach Technology Metals Acquisition Corp. Common Stock (Nasdaq: WTMA), American Rebel Holdings, Inc. Common Stock (Nasdaq: AREB), Capitalworks Emerging Markets Acquisition Corp Class A Ordinary Shares (Nasdaq: CMCA), HCM Acquisition Corp Unit (Nasdaq: HCMAU).
Notable Equity Crowdfunding Campaigns Ending Today: Skycart (Wefunder), Endeavour (SeedInvest), Lepley (Honeycomb), River Ridge Farm and Market (MainVest), Queen’s Gambit (MainVest).
Notable Economic Events Today: U.S. Leading Index (10:00 a.m. ET).
Report: Peloton Halts Production of Bikes and Treadmills
Photo by Andrew Valdivia / Unsplash
Exercise equipment company Peloton (Nasdaq: PTON) is temporarily ceasing production of bikes and treadmills due to poor consumer demand, according to a report from CNBC on Thursday.
Details: Production will be paused for at least two months. The CNBC report cited a recent company presentation about a reduction in demand for fitness equipment.
Numbers: Shares of Peloton dropped 23.93% on Thursday and the stock is down 84.68% in the past year.
Final Thoughts: The dip might be appetizing for some investors, but the valuation is still not good. Peloton reports earnings on February 8.
Could Other Cryptos Overtake Bitcoin in 2022?
As millions of new investors go into cryptocurrency in 2022, Bitcoin may no longer be considered the dominant digital currency.
Data: A year ago, Bitcoin made up 70% of the total market cap in crypto. Today, Bitcoin makes up 40% of the total market cap. While it is still the top coin, some investors are looking elsewhere.
Crash: Part of the problem with Bitcoin is that some experts are bearish on the currency, with predictions that the price could drop to $10,000 this year. Of course, there are also bullish predictions of Bitcoin hitting $100,000 this year.
Next Big Coins: Keep an eye on smart contract coins, such as Ethereum, Cardano, and Solana. These currencies represent incredible platforms.
Final Thoughts: Ethereum’s price increase was better than Bitcoin’s price increase in 2021. Will that trend continue in 2022?
Trends to Watch
I’m Loving It: McDonald's will expand testing of its meatless McPlant burger to 600 new locations (NPR)
Augmented Reality Check: Google reportedly planning a new AR headset for 2024 (TechCrunch)
Brainstorm: Elon Musk's Brain Implant Company Is Inching Toward Human Trials (Bloomberg)
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