Disney andRoku shares dropped Wednesday afterNetflix badly missed earnings estimates.- Disney runs streaming service Disney+, and
Warner Bros. Discovery houses services including HBO Max.
Disney, Roku and shares of other
Disney, which runs the Disney+ service that includes Hulu, dropped 3.9% and Roku declined 5.4% and touched its weakest price in a month in hitting an intraday low of $106.37.
Warner Bros. Discovery, the newly merged media conglomerate that's home to HBO Max, Discovery+, and CNN+, lost 5.3%. Paramount sports-centered streaming service FuboTV lost 6.6%.
The shares were under pressure after Netflix late Tuesday said it lost 200,000 subscribers in the first quarter. Its shares sank 37% during Wednesday's session, wiping out $54 billion in market capitalization, and tumbled more than 20% during Tuesday's after-hours session.
That "number that isn't easy to digest," said Naeem Aslam, chief market analyst at AvaTrade, in a note Wednesday about the loss of 200,000 subscribers. A number of factors driving down Netflix's subscribership have made investors "nervous," he said.
Among them, "we are in an environment where consumers have started to cut back on luxury items, and Netflix's subscription is part of that segment," hurt by soaring inflation.
Netflix suffered its first loss of subscribers since 2011 and it had previously projected the addition of 2.5 million for the first quarter. Netflix also said it expects to lose 2 million subscribers in the second and current quarter.
Netflix stock ahead of the first-quarter earnings report had already been down more than 40% this year. The stock has lost more than 60% from its recent high in November, on track for a fourth drawdown of 60% or more since Netflix went public in 2022, according to Bespoke Investment Group.