It was a record-setting day in the worst way for Netflix on Thursday, with the streaming giant’s valuation dropping $17 billion after the company reported disappointing second quarter subscriber growth after the market close on Wednesday.
Netflix’s stock slumped 10.3% to $325.21 per share during Thursday trading, marking its worst single-day percentage drop in three years. Compounding matters, the $17 billion hit in its market capitalization was the biggest single-day drop in Netflix’s history.
To put that in perspective: Netflix’s one-day loss was greater than the valuation of both Roku ($12.4 billion) and Viacom ($12.5 billion), and came within shouting distance of matching CBS ($19.2 billion). Still, even after its Thursday gut punch, Netflix is worth about $142 billion.
Netflix’s woes come a day after it reported only 2.7 million new customers signed up during Q2 — falling about 2.5 million subscribers short of Wall Street’s expectations. The company even lost subscribers at home, with 126,000 U.S. accounts dropping the service. Netflix, in its letter to shareholders, blamed the minor exodus on its recent price hikes.
After adding its latest overseas customers, Netflix now has 151.6 million global subscribers. Despite flopping on subscriber growth, Netflix did post better-than-expected earnings and its $4.92 billion in revenue essentially matched Wall Street estimates.
Tom Harrington, senior research analyst with Enders Analysis, said Netflix’s Q2 results were “concerning,” but added it’s likely a “minor blip” due to a lack of compelling shows that debuted or returned during the quarter. “In all likelihood there will be growth in the current quarter, with big returning original shows like ‘Stranger Things,’ ‘Orange Is the New Black,’ ‘Money Heist’ and ‘Mindhunter’ — something that “usually results in a boost,” Harrington said.