Over the past five months, Netflix stock has plunged nearly 70%. The latest slide wiping out US$54.3 billion in market value — came in the wake of a disastrous earnings announcement a day earlier when streaming pioneer revealed it had lost subscribers for the first time since 2011 and was pivoting to an ad-supported model to keep growing. Excluding Russia, where it has suspended operations, Netflix missed its estimated guidance of 2.5 million new subscribers for the quarter by 2 million. Aside from some growth in Asia, subscriber numbers fell across the board in all geographies.
In 2008, at the height of the Global Financial Crisis, a small listed DVD-by-mail distributor made a hard pivot to video streaming, delivering content online. Few gave the fledgling DVD distributor a chance.
Sceptics argued when the world was ready to consume movie and TV content online, the business would be dominated by media giants like Walt Disney Inc or NBCUniversal. Last November, with its share price surging to US$691 ($941), Netflix had a market capitalisation of US$310 billion, far bigger than any other media company on earth. In late 2009, Netflix stock was trading around split-adjusted US$7 a share.
