Netflix Loses $54 Billion in Market Cap After Biggest One-Day Stock Drop Ever .

UPDATED: Netflix shares plummeted to their lowest point since January 2018 as investors reacted to the streamer’s first subscriber loss in more than a decade — bringing years of booming growth to a screeching halt.

The stock closed down 35.1% on Wednesday, to $226.19 per share, marking Netflix’s biggest one-day drop ever in percentage terms. The company shed $54.4 billion in market capitalization overnight, the largest single-day decline in its history. The second-biggest drop came in January, when it saw $49 billion in market cap shaved off after Q4 subscriber adds came up short and Netflix warned of slowing growth.

Netflix shares sank to a more than four-year low — its lowest since shares closed at $220.46 on Jan. 19, 2018 — after the company posted a Q1 loss of 200,000 subscribers and projected that it will lose another 2 million subs in Q2, prompting a wave of analyst downgrades. Netflix shares have shed 65% of their value over the last six months.

Among other factors, co-CEO Reed Hastings blamed the subscriber shrinkage on “great competition” and the company’s estimate that more than 100 million households are streaming the service using a shared password without paying for it.

To try to right the ship, Netflix is aiming to convert freeloading password-users into subscribers and to roll out a lower-cost, ad-supported tier over the next two years.

“I know it’s disappointing for investors, and it is for sure,” Hastings said on Netflix’s Q1 video interview Tuesday. “But internally, we’re really geared up, and this is like our moment to shine. This is when it all matters. And we’re super focused on achieving those objectives and getting back into our investors’ good graces.”

After the earnings misfire, Pivotal Research Group analyst Jeff Wlodarczak cut his rating on the stock to from “buy” to “sell” and chopped his 12-month price target by almost 60%, to $235 per share.

“After what can only be called a shocking 1Q subscriber miss and weak subscriber and financial guidance we reduced our subscriber forecasts and pushed back our profitability forecasts substantially,” Wlodarczak wrote in a note to clients.

The Netflix Q1 report exacerbates investor concerns that “streaming appears nearly fully penetrated globally post-COVID,” the analyst added. “The NFLX flywheel has slowed substantially, and it will take time to get it going again, which is likely to create substantial uncertainty around the name for at least the balance of ’22.”

Wlodarczak is bearish on Netflix’s plan to offer a cheaper, ad-supported tier — calling that a net negative, because “we believe it cheapens the brand and the product vs. the current great consumer experience and introduces ad volatility to results.”

Netflix’s disclosure that over 100 million freeloaders (including 30 million in the U.S./Canada) are mooching off someone else’s account “is further evidence that the product has hit maturity in key markets,” MoffettNathanson principal analyst Michael Nathanson wrote in a note. The company acknowledged intensifying competition — and told investors it expects to grow share of viewing while decelerating growth in spending on content. “We question how easy that would be in a world where everyone wants to take share in the market by spending more on content,” Nathanson observed.

Overall, Netflix’s earnings report and discussion “portrayed a company that was more surprised by things and less clear than ever about the path forward,” Nathanson wrote. The firm maintained a “neutral” rating on Netflix and slashed its 12-month price target from $350 to $245 per share.

For Netflix, the Q1 results reflected a “perfect storm of domestic market saturation, competition for content, competition for subscribers, inflation and an ill-timed price increase,” Wedbush Securities analyst Michael Pachter commented in a research note. Those issues were compounded by Russia’s invasion of Ukraine and the corresponding economic sanctions imposed on Russia.

“We would remain on the sidelines until there is evidence that Netflix is a growth company once more,” Pachter wrote, reiterating Wedbush’s “neutral” rating and lowering the price target from $342 to $280 per share.

Netflix’s moves to monetize password-sharers and roll out an ad-supported tier are unlikely to produce meaningful changes for its U.S. business in the near term, according to Neil Macker, senior equity analyst at Morningstar. The firm lowered its price target on Netflix shares from $305 to $280 per share, citing expectations for much lower subscriber growth in 2022 and slower margin expansion.

With the password crackdown, “Netflix may be able to squeeze a few more dollars out of some of the primary households, but we think that other ones will look at the new sharing fee as another pricing increase and cancel,” Macker wrote in a research note. Moreover, many of the households that don’t pay “may not view the service as valuable enough to pay for, particularly in higher price markets like the U.S. and Western Europe.”

Netflix’s loss of more than one-third of its market cap in one day is not the biggest in terms of actual dollars. In February, Meta, the parent company of Facebook and Instagram, lost about $237 billion in value after warning of revenue headwinds from Apple’s iOS privacy changes and increased competition from TikTok. Other massive market-cap losses have included Apple’s $180 billion drop in September 2020 and Microsoft’s $178 billion plummet in March 2020.

Previously, Netflix had not reported a drop in subscribers since the third quarter of 2011, which came after it split its DVD-by-mail and streaming services. The company’s stock had previously had its biggest one-day percentage stock drop on Oct. 25, 2011, when shares fell 34.9% after Netflix reported a net loss of 800,000 customers.

MY OPINION : Netflix has become like a lot of other companies these days. That have adopted a woke culture , they have lost 200,000 subscribers and over 50 billion in value . And a lot of the Netflix content is garbage as a result .

Meta Faces Historic Stock Rout After Facebook Growth Stalled.

Shares of Facebook parent Meta Platforms Inc. plunged 27% in an epic rout that, in its sheer scale, is unlike anything Wall Street or Silicon Valley has ever seen.

The catalyst was startling news that for the first time ever, Facebook’s user growth seems to have hit a ceiling and its momentum is stalling. Thursday’s collapse wiped out more than $230 billion of market value in an instant — a figure unprecedented in stock-market history — and has investors asking a question that once seemed unthinkable: Are the best days over for Facebook, one of the world’s most widely held technology stocks?

This quarter’s sales forecast also disappointed Wall Street and Chief Executive Officer Mark Zuckerberg saw his personal wealth potentially plummet about $24 billion. He acknowledged that Meta is facing serious competition for user time and attention, particularly from viral video-sharing app TikTok. 

The report marks a dramatic turnaround for a company that has posted share gains in every year but one since its 2012 initial public offering, stoking concern that Meta Platforms’ flagship product and core advertising moneymaker has plateaued after years of consistent gains. 

“These cuts run deep,” wrote Michael Nathanson, an analyst at brokerage Moffett Nathanson, who titled his note “Facebook: The Beginning of the End?” The results were “a headline grabber and not in a good way.” 

Zuckerberg said Meta’s rival to TikTok, Reels, is growing quickly, but monetization has been slow. He asked investors for patience as the product ramps up.

“Over time we think that there is potential for a tremendous amount of overall engagement growth” with Reels, he said on a conference call Wednesday. “We think it’s definitely the right thing to lean into this and push as hard to grow Reels as quickly as possible and not hold on the brakes at all, even though it may create some near-term slower growth than we would have wanted.”

The misses come at a critical juncture for the company, which is fighting regulatory battles on multiple fronts and also trying to justify a costly shift in corporate strategy to bet on the metaverse, Zuckerberg’s vision for an immersive internet that may take years to realize. For the better part of a decade, it has seemed like Facebook would never stop growing. Now young users — the future consumers of its advertising — are choosing platforms like TikTok and Google’s YouTube for entertainment and community instead.

Rarely, if ever, has Meta been confronted by so many substantial threats at the same time. Aside from user growth woes and intensifying competition, Meta is also contending with a crackdown on targeted advertising by Apple Inc., which it said may trim $10 billion in revenue this year, and cutbacks by advertisers that are paring budgets because of rising costs and supply chain disruptions.

The company, which changed its name to Meta last year to indicate its future direction, also said it will be taking on the META stock ticker in the first half of the year. Shares plunged as low as $237.07 in New York. 

At those levels, it’s the biggest collapse in market value for any U.S. company. But there’s no certainty the losses will hold, especially given the recent volatility that’s whipped across technology shares. Markets have swung wildly in recent weeks, with buy-the-dip traders sometimes storming in during the final hours of the trading day. 

Other social media companies also saw their shares decline, with Snap Inc. down 21%, Pinterest Inc. down 8% and Twitter Inc. down 5.1%. 

Read more about the dilemma facing antitrust regulators looking into Meta’s market power. 

Meta’s Reality Labs division, which includes the company’s investments in the metaverse and virtual reality, reported an operating loss of $3.3 billion for the fourth quarter, as the company disclosed its contribution for the first time.

On the company’s call, Zuckerberg was asked when parts of the metaverse will begin to arrive for users. He replied that some aspects — like digital avatars — are already here. He also reminded analysts that while the metaverse will be best experienced using a virtual or augmented-reality headset, people will still be able to access the digital environment through Meta’s existing apps, like Facebook and Instagram.

Facebook reported 2.91 billion monthly users in the fourth quarter, flat compared with the prior period. The main app’s daily active users in North America — the company’s most lucrative market — declined slightly from 196 million to 195 million users.

Meta said revenue in the current period will be $27 billion to $29 billion, compared with the $30.3 billion analysts estimated on average. Changes to Apple’s mobile software that require user permission to gather data for ad tracking are significantly crimping revenue by limited targeted advertising, Meta said.

Sales are also taking a hit because Meta doesn’t make as much money from Reels video clips as it does from other products, like News Feed and Stories. Still, executives painted an optimistic picture, saying Reels will one day make as much money as those other products. 

Net income in the fourth quarter was $10.3 billion, or $3.67 a share, Meta said, falling short of the $3.84 per share analysts projected. Revenue was $33.67 billion, compared with the $33.43 billion average estimate.

Wednesday’s earnings report was the company’s first since changing its corporate name from Facebook late last year. When Meta announced the change, the move was criticized for being a distraction from the many problems Facebook has been asked by regulators to fix with its existing networks. But it’s not just branding — resources and talent within Facebook have shifted to the new focus. Meta had said in October that it would see a $10 billion reduction in operating profit for the year because of investments in Reality Labs.

It was also the first financial report since Zuckerberg declared that attracting young people — 18- to 29-year-olds — was the company’s new “North Star.” The company hasn’t said how it plans to disclose its progress toward that goal, and there was little shared Wednesday to address this new push besides a heightened focus on Reels. Young people in particular have been drawn to apps such as ByteDance Ltd.’s TikTok and Snap Inc.’s Snapchat, raising concerns within Meta. That was spotlighted by internal research and communications released by whistle-blower Frances Haugen last year, a trove of documents known as the Facebook Papers.

Meta doesn’t regularly break down users by age. It also doesn’t say how many people use Instagram or messaging service WhatsApp, or how much revenue those properties generate.

The company gets about 97% of its revenue from advertising on its social platforms. It warned again about the impact of recent changes to Apple’s iOS software for iPhones, which requires that companies like Meta ask users for explicit permission to gather data about them. Early estimates show that most users decline this tracking, which makes targeted advertising — Facebook’s main selling point to businesses — harder. 

“We believe the impact of iOS overall is a headwind on our business in 2022, on the order of $10 billion,” Chief Financial Officer David Wehner said on the conference call.

Chief Operating Officer Sheryl Sandberg said the Menlo Park, California-based company is working on ways to help advertisers target people with messages that require less personal data. 

“There are also a lot of things that small businesses and large businesses can do to take advantage of the many targeting and measurement tools we have,” Sandberg said on the call.

MY OPINION : You can only grow so much . I think FaceBook will go the way of MySpace . Plus FaceBook may have started out with good intentions . But these days the platform is obviously bias and corrupt . You can say it is no longer a open and free platform . It is if you are left leaning in your political view .

CW Network May Be Sold – What That Might Mean for Streaming Services

JAN 6, 2022, 9:53 AM PST – Ben Bowman

The Wall Street Journal reports WarnerMedia and ViacomCBS are considering a sale of the CW Network. There’s a chance that could impact your favorite shows.

The Journal reports “the network isn’t profitable as a stand-alone broadcast entity, but the content produced for it is a valuable asset for other platforms at the parent companies.” In 2022, linear channels aren’t as valuable as they used to be. Their primary value to the audience is the ability to watch live events. Since WarnerMedia and ViacomCBS have their own streaming services, the companies may be content to keep the shows on the streaming platforms, possibly selling them into syndication or to the new owner of the CW.

This means shows like “The Flash” or “Riverdale” would likely continue production, but their availability on the CW would hinge on whether the new owner of the channel would be willing to agree to terms.

The company rumored to be interested as a buyer is Nexstar, the group behind NewsNation. In theory, Nexstar could try to keep the CW as the same youth-focused network it has been. Or they could revamp it entirely, as Disney did when it purchased the former CBN/Family Channel and changed it into Freeform.

As we’ve seen in recent months, owners of large network blocs have been able to hold streaming services hostage by demanding higher fees for retransmission. NBCUniversal and Disney recently went to war with YouTube TV, threatening to remove their stations unless YouTube TV met their demands. In both cases, there was a resolution. Nexstar currently owns 197 television stations across the United States, so the addition of the CW would bolster their portfolio.

Streaming services are trying to provide the maximum content at the lowest price while station owners are trying to extract the highest fees possible. As we mentioned, live events (specifically sports) provide the biggest leverage in these negotiations. The CW doesn’t offer sports, but it would be relative “throwaway” channel that Nexstar could offer as a “goodwill gesture” in exchange for higher prices on its network affiliates.

Fans of the CW’s programming shouldn’t worry – the production companies behind those shows still want to crank out those titles. They may just debut on a streaming service first before moving to the CW. Or they may leave the CW entirely, depending on the new owner’s preference.

MY OPINION: I’m going to say it , and you’ve heard it so many times it probably is going to make you sick . Get woke go broke ! The CW was created back in 2005 and has ever been profitable . All the shows on the CW are crap , except for SuperMan and Lois which is good . Ad least for right now , which comes on tonight .

The late Stan Lee’s Twitter account is being used to hawk NFTs and people are pissed.

“No F’n Thanks”By Matt Binder  on December 14, 2021Marvel fans are not happy that Stan Lee’s Twitter account is being used to promote NFTs. Credit: Michel Boutefeu/Getty Images.

NFTs have already felt the wrath of gamers. 

Now, comic book lovers, superhero movie fans, and Marvel aficionados alike are lashing out against NFTs, too.

On Tuesday morning, the late Stan Lee’s Twitter account sent out a tweet promoting NFTs of the Indian superhero Chakra the Invincible that will be sold in the coming weeks. The link in the tweet, “chakraverse.io,” sends users to a website belonging to Orange Comet, a company that creates NFTs for brands and sports teams.

Stan Lee’s Twitter Account .

​​”From championing diversity to embracing new tech, Stan was 1 step ahead of the curve,” reads the tweet. “To honor his innovative spirit, Stan’s 1st Indian hero, Chakra The Invincible, debuts in his own NFT (digital art) collection from 7:30pm PT 12/27-12pm PT 12/29! Sign up: http://chakraverse.io“

The backlash to this promotional tweet being sent from Stan Lee’s Twitter account was swift and unforgiving.

MY OPINION : This is disgusting the man is dead , let him rest in peace . This is the world we live in today . Putting words in a dead man’s mouth . Don’t let these asshole’s fool you . If this is what you need to do to sell your product . It and you are worthless . And not worth buying .