Netflix’s stock has plummeted 35% after the company disclosed a dramatic decrease in members and warned that millions more are about to abandon the streaming service.
It slashed the company’s market worth by more than $50 billion, and analysts said it would be difficult to get back on track.
Netflix is up against stiff competition from streaming competitors, but it was also hurt after raising pricing and exiting Russia.
However, others have questioned the company’s ambitions to promote growth, which include introducing a free ad-supported service.
It also intends to crack down on password sharing, predicting that over 100 million non-paying households utilize this method to access the site.
William Ackman, one of America’s most well-known investors, pulled his $1.1 billion stake as a symbol of the discomfort.
Pershing Square Capital Management, his hedge fund, had purchased the stock just three months before.
Mr. Ackman said in a statement that while Netflix’s ambitions to modify its economic model were understandable, investing in the firm felt too risky.
“While Netflix’s business is essentially straightforward to grasp, we have lost faith in our ability to estimate the company’s future prospects with a sufficient degree of certainty in light of recent developments,” he said.
Netflix reported in a trading update on Tuesday that its overall number of subscribers fell by 200,000 in the first three months of 2022, falling short of its goal.