[Asia Economy New York=Special Correspondent Joselgina] Netflix, the world's largest online video streaming service (OTT) provider, is experiencing a plunge of around 36% during trading on the New York Stock Exchange on the 20th (local time) as it recorded a subscriber decline for the first time in 11 years.
As of 3:45 PM (Eastern Time) on the day of the New York stock market close, Netflix is trading at $222.87, down 36.07% from the previous close. If it closes at this level, it is expected to mark the worst day in about 18 years. More than $56 billion in market capitalization has been wiped out. Netflix opened the day at $245.20 and fell as low as $212.51 during the session.
The day before, Netflix announced that its paid subscribers in the first quarter decreased by 200,000 compared to the fourth quarter of last year, totaling 221.6 million. This is the first time Netflix’s subscriber count has turned negative since 2011.
Wall Street investment banks' consecutive downgrades of Netflix’s investment ratings also contributed to the sharp stock decline.
JP Morgan lowered its price target by 50%, stating that Netflix could hit new lows in the coming months. Wells Fargo downgraded its investment rating to 'Equal Weight.' Bank of America (BoA) also downgraded its rating, evaluating that Netflix’s additional measures, such as cracking down on shared accounts, would not have a significant impact on the company until 2024.
Netflix’s plunge is also dragging down the stock prices of other streaming companies such as Disney, Roku, and Warner Bros. Discovery on the same day.
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