Netflix shares fell the most in at least two years on Wednesday, after losing over 200,000 global subscribers in the three months ending in March.
The company announced it was the worst rating since late 2019, while that drop was less than 0.1 percent of its total customer base, it marked Netflix’s first decline in subscribers in more than a decade.
Netflix’s more than 30 percent loss is estimated at $50 billion dollars on Wednesday. Netflix shares will open Thursday at around $226 dollars. In November, Netflix traded at $691 dollars per share.
The loss of subscribers and the company’s various plans to revive business “change the historically simple story” of Netflix’s solid success, said Wells Fargo analysts, who cut its price target in half.
To attract more viewers, Netflix is preparing cheaper subscriptions with advertising, which it expects to roll out in the next couple of years. The company anticipates a much larger drop in its second quarter, around two million net subscribers.
The company also says it will focus more on converting the 100 million households who watch Netflix for free thanks to shared passwords to paying customers.
“When we were growing fast, it wasn’t the high priority to work on,” co-founder Reed Hastings admitted. “And now we’re working super hard on it.”
Chief operating officer Gregory Peters said Netflix wasn’t trying to shut down sharing, “but we’re going to ask you to pay a bit more to be able to share.”
