Netflix’s share price witnessed substantial gains. On September 14, it was up about 44.4%. After a strong performance in previous months, Netflix’s share price pulled back last week amid a wider tech sector setback. Recovering quickly from an intraday low of $290.25 on March 17, Netflix’s share price has reached $420 within a month and has remained consistently more than $450 since the end of June, reaching a peak of $575.37 on July 13.
This fall reflected a volatile period for Netflix’s share price, which increased to $556.55 on September 1 before dropping to an intraday low of $485.98 on the morning of September 4. It underperformed the S&P 500 Index, which fell 5%, the DJIA (Dow Jones Industrial Average), which dropped 3.4%, and streaming subscription rival Disney with a 3.1% decline over the same period.
Netflix appeared to be immune to negative market impacts
Netflix is one of the leading companies which appeared to be immune to the negative market impacts of the Corovanivurs crisis. During the worldwide lockdowns, people were forced to stay at home as they had more free time.
Reed Harisson, Netflix’s CEO, reported that sleep was one of its biggest virals during the epidemic.
On August 31, Techcrunch noted that the company was extending a free service offering trialed in some markets to its global audience, to attract more subscribers. The announcement found out optimistic for investors, as stocks increased to the peaks on September 1. However, that was shattered by pessimism across U.S. markets on September 3, which began to the pullback in Netflix’s share price.
The economy didn’t increase Netflix’s share price, as fewer people will have time to sit around and watch shows at home.
According to Analysts, Netflix should not be worried yet. Scott Knapp, the chief market strategist at CUNA Mutual Group, noted that the pullback across tech could be a market correction following exuberant overpricing of the industry’s shares in recent weeks.