Netflix shares fell more than 10% in early trading on Friday, as investors digested the surprise exit of co-founder and Chairman Reed Hastings, and a tepid forecast.
Shares have fallen more than 18% since early December, when Netflix first submitted the bid for Warner Bros Discovery. They have rebounded around 21% through Thursday’s close after the deal was scrapped in late February, according to a Reuters report.
Earlier this year, Netflix abandoned a high-profile bid to acquire Warner Bros Discovery, exiting what could have been a transformative deal in exchange for a $2.8 billion termination fee.
Hastings’ eventual exit had been broadly expected after he stepped down as co-CEO in 2023, handing day-to-day operations to Ted Sarandos and Greg Peters. Still, the announcement came at a sensitive moment for the company, analysts said.
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The company has been broadening its strategy beyond its traditional subscription model as growth moderates and competition intensifies, leaning more heavily on advertising, live programming, and price increases to lift revenue per user.
A chart showing the five-year share-price return for Netflix and traditional media peers
With subscriber growth hitting a ceiling in mature markets, analysts say price hikes could help offset the slowdown, but not for long.
Netflix on Thursday beat first-quarter revenue and profit expectations but forecast earnings per share for the current quarter below analysts’ estimates, warning revenue growth would slow to its weakest pace in a year, according to LSEG data.
