Tuesday 5 July 2022 08:57 PM Stranger Things Season 4 FAILS to rescue Netflix despite final episode causing ... trends now
Netflix stock is still down 70 percent despite the 'short-term relief' provided by the release of the final two episodes of Stranger Things season four.
The platform's stock has been on the rise since Friday when an overwhelming influx of viewers pushed Netflix beyond its capacity and caused it to crash.
Analysts warn Netflix is still a 'business in transition' trying to 'battle subdued' subscriber growth fueled by record-high inflation rates and stiff competition from Amazon, Apple and Disney+.
Netflix lost 200,000 subscribers at the end of Q1, shrinking the value of the company nearly 70 percent. It also announced it expects to lose another 2 million subscribers by the end of Q2.
The platform also cut 300 staffers in late June, weeks after laying off off over 150 employees as it grappled with its weakened stock price. Netflix stock was worth over $600 a share in January, but as of Tuesday afternoon was trading at around $183.
Netflix stock is still down 40 percent despite the 'short-term relief' provided by the release of the final two episodes Stranger Things season four
Netflix stock was worth over $600 a share in January, but as of Tuesday afternoon was trading at around $183
Thomas Champion, director and senior research analyst at Piper Sandler, said Netflix is a company investors should monitor but not yet buy.
'We continue to view NFLX as a business in transition,' Champion said Tuesday in a statement to CNBC. 'Subscriber growth slowed significantly and it's possible Covid concealed an increasingly crowded streaming market.'
The analyst explained the recent release of Stranger Things, which crashed the platform for more than 13,000 users, shows reason for 'optimism' but doesn't mean the streaming giant has recovered yet.
'Stranger Things 4 may provide short-term relief, but Top 10 hours are mixed. The ad-supported opportunity does give reason for optimism, but will take time,' he said.
The show's fourth installment had already set the set the record as the No. 1 English-language series on Netflix after the first seven episodes were released on May 27.
Stranger Things 4 Volume 1 racked up 930.3 million hours of streaming viewership in its first 28 days on Netflix, breaking a record previously held by Bridgerton - another platform original series.
Champion argues that despite being the company's second-most watched show behind last year's Squid Game, Netflix user growth remains 'subdued.'
Streaming of Netflix's 'Top 10' shows has declined 4 percent quarter over quarter, he noted, seemingly implying Stranger Things' success is not enough to suggest overall recovery for the company.
The investment firm also pointed out how implementing an ad-supported tier could be a more than $1 billion quarterly revenue opportunity for the company and questioned if Netflix's 'management is being more reactive than proactive here.'
Analysts warn the recent release of Stranger Things, which crashed the platform for more than 13,000 users, shows reason for 'optimism' but doesn't mean the streaming giant has recovered
While Netflix was ahead of the streaming pack for years, its newfound losses can be attributed to other big companies shifting weight behind their
