Why is Netflix's market value dropping?

It was in April when the stock of Netflix fell a bit but by the time that May rolled around, the market value of Netflix became higher. It was even able to top the market value of Disney for a short period of time. Of course, Disney’s stock rose higher again after some time.

More and more people are starting to drop their cable subscriptions in order to choose Netflix. They believe that they can watch more shows whenever they want if they choose this for their entertainment. It is expected that the stocks of Netflix will still increase in the long run but their costs to produce shows may also rise in the process.

It’s not dropping. You have misread the news. The only reason Netflix lost 24 bn$ is because they did not meet a targeted amount of subscribers. It’s just an unnecessary panic created by its shareholders.

To give you a brief account, Netflix had promised second quarterly goals of near 6 million subscribers to its shareholders. Unfortunately, the second quarter capped at around 5.1 million new subscribers. The current numbers indicate a 40% revenue increase when compared to the second quarter of the previous year. The revenue in the second quarter was around 2.9 bn$ instead of analyst predictions of 4bn$.

This caused an uproar among the shareholders and that is why Netflix’s market value dropped. Don’t worry, Netflix is still worth around 163 bn$. You can binge watch Stranger Things as much as you want. It’s not going anywhere.