Mama Said Knock You Out. Wall Street Places Bets If Hollywood Streaming Gets A Comeback
Traders bet on if ShowBiz can recover, with Netflix leading the way, after a good/terrible start of 2022
Wall Street is betting on a big comeback for Netflix after a no good, terrible start to 2022 where the streaming giant hemorrhaged subscribers amid fierce competition from the likes of Disney, Paramount and Warner Bros. Discovery.
Netflix posts third-quarter results after the stock market closes Tuesday, and co-chief executives Reed Hastings and Ted Sarandos will lead a call with Wall Street analysts to map out their strategy. They are charging full-speed ahead to launch an advertising-supported version of the platform in November, and on Monday unveiled the first step to cash in on the massive number of subscribers who share passwords.
Netflix’s ability to launch an ad-based service so quickly has caught the attention of investors, who have been concerned Disney would dominate the streaming market with its own upcoming ad-supported tier. Shares of Netflix have jumped 16% since it unveiled its ad tier plans last Thursday, and moved higher in pre-market trading on Tuesday. (The stock is still down nearly 60% from the start of the year.)
Remember, Hastings almost casually admitted six months ago that he might be willing to introduce an ad tier as something he’s “trying to figure out over the next year or two.” Management had to act more quickly once Netflix stock that once traded near $700 a share cratered to under $200 in a year’s time after some 1 million subscribers defected from the service this year.