They saying its a WIN that they only lost 1M
Shares of Disney, Paramount, Warner Bros. Discovery all closed higher and continued to gain in after-hours trading when
Netflix, the dominant streamer, lost fewer subscribers in the June quarter than it said it would.
Netflix clearly led media shares as its battered stock surged nearly 6% during the session and gained more than 7% after-hours. In a pill of first quarter announced in April, Netflix lost net subscribers for the first time in years and anticipated a steep dip of 2 million more for the latest three months — sending Wall Street into a tailspin calculating the costs/benefits of streaming. But it only lost 970,000, or less than half of what it predicted, and said the number will turn positive in the current quarter.
The relief on CNBC was palpable and spread. Disney, which jumped more than 4% by the close, gained another 2% in late trade. Warner Bros. Discovery rose 3% for the session, then another 1.4%. And Paramount gained 2% plus 1% after-hours. Netflix reported numbers after the closing bell.
The streamer’s shares lost a whopping 70% in the first half of 2021, wiping out billions of dollars of value, so it has steep road back with Wall Street keeping a laser focus on streaming economics. Last quarter, co-CEOs Reed Hastings and Ted Sarandos attributed slowing growth in part to increased competition, as well as smart TVs, account sharing and competition. Macroeconomic factors are weighing on its business, as they are on most sectors. Netflix today called out exchange rates in particular as the dollar surges against the euro and other currencies. Nearly 60% of its revenue comes from outside the U.S..
The company is launching an ad-supported tier early next year and will start charging a small fee for account sharing in 2023. It expects to add 1 million subs in the current quarter.
