Shares of streaming giant Netflix fell to their lowest level since 2020 due to no more travel restrictions and sit -at -home instructions, in addition to an increase in the amount of competition.
On Monday, Netflix shares fell more than 2% to US $ 332 per unit, the lowest in 52 weeks, further marking a contraction of more than 50% of the company's shares that once hit the $ 700.99 level in mid -November last year.
Reportedly the last time Netflix shares recorded a value of $ 332 was on March 20, 2020, before the Covid-19 pandemic that struck forced the world’s population to sit at home.
For the record, Netflix recorded soaring profits throughout 2020 and 2021 when consumers were instructed to sit at home to curb the spread of the Covid-19 virus.
However, since the sit -at -home mandate and restrictions were eased in most countries, Netflix shares are seen to be under pressure and the company’s latest earnings report shows a declining number of subscribers.
According to reports, Netflix expects 8.5 million new subscribers but in the 4th quarter of last year, they only recorded 8.3 million, further impacting the company’s stock decline.
The situation worsened when cinemas were allowed to reopen and saw various blockbuster films lined up for screenings.
A JPMorgan report last year stated that Nefflix planned to release movies in the traditional way (cinema) but the company was seen to be more focused on streaming with video-on-demand offerings for users of its platform.
Also, another factor that caused Netflix shares to fall was due to increased competition from other streaming platforms such as Apple and Disney.
According to Wedbush analyst Michael Pachter, there is growth in the streaming sector and consumers are seen to be more geared towards cable or satellite streaming such as Hulu, Paramount+, Disney+, HBO Max and Amazon Prime.
He added that other streaming companies were also seen actively licensing their content, so it indirectly forced some Netflix content that was previously borrowed to be returned.
