Shares of Netflix Inc. slumped 20.28% on Thursday extended trading after it reported weaker first-quarter guidance on subscriber growth.
The American streaming giant lost 103.05 points to $405.20 per share, wiping almost all its pandemic-fuelled gains.
The downturn also trailed its fall of 1.48% or 7.61 points to $508.25 per share in the regular trading session.
Correspondingly, the firm now trades 14.92% or 89.12 points lower since the start of the year.
Netflix projected to add 2.50 million subscribers in the first quarter of 2022, lower than the analysts’ estimate of 6.93 million.
At the same time, the figure is far below the 3.98 million it recorded in the same period last year.
Accordingly, the entertainment company explained that the rising competition from other businesses was one reason for the slowdown.
Its rivals like Walt Disney poured billions into building new programs to grab a share of the streaming market.
Similarly, Disney stocks plummeted 3.33% or 4.92 points to $142.70 per share in the after-hours.
Likewise, Roku Inc. edged down 4.40% or 7.36 points to $160.00 per share.
Meanwhile, Netflix’s price increases in the United States and Canada can help offset its waning customer growth.
In the US, the monthly cost for the basic plan climbed from $8.99 to $9.99. The standard plan also rose from $13.99 to $15.49, and the premium jumped from $17.99 to $19.99.
The company also gave an update on its push into gaming. The new venture may help it gain insight into which characters are most popular and could eventually help shape its content.
Netflix Reports Q4 2021 Results
Moreover, Netflix’s weaker guidance arrived as fourth-quarter results outpaced top and bottom lines.
The entertainment company reported earnings per share of $1.33, crushing the expected $0.82.
In addition, its revenue posted at $7.71 billion, in line with the analysts’ forecast.
Then, Netflix gained 8.28 million global paid net subscribers, higher than the expected 8.19 million.
However, the addition came in lower than its data in 2020, where it obtained 8.50 million subscribers.
It cited that the persisting pandemic and broader economic concerns kept growth from rebounding to pre-COVID levels.