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View all search resultsNetflix sinks as Wall Street flees 'stay-at-home' stocks
The streaming video service lost some US$40 billion in market capitalization.
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O
ne day after shares of at-home fitness company Peloton tumbled, Netflix found itself in Wall Street's hot seat on Friday as markets reassessed the diminishing growth prospects of so-called "pandemic stocks".
The streaming video service lost some US$40 billion in market capitalization after releasing results on Thursday night that projected growth of just 2.5 million subscribers in the first quarter, its slowest expansion since 2010 and a big downshift from the 55 million subscribers over the last two years as COVID-19 transformed daily life.
Netflix shares finished 21.8 percent lower, a similar level to that experienced on Thursday by Peloton, which recovered some of its losses on Friday.
Such selloffs are a particularly brutal manifestation of a market dynamic that's been going on for months in stay-at-home equities, whose investment thesis has worsened with the lessening risk of pandemic-caused lockdowns.
Gregori Volokhine, president of Meeschaert Financial Services, notes that Netflix, Amazon, PayPal, eBay and Etsy have all fallen between 20 and 50 percent from their peaks.
"More people are going out and leaving their homes," Volokhine said. "This trend has been going on for months."
Many of these companies attained valuations built on the idea that the fast growth seen during the pandemic would continue.
