Netflix’s Stock Suffers 35% Loss – Closing Bull April 22nd, 2022
Quick Summary:
In this week’s Closing Bull, we’ll be discussing the ongoing events between Ukraine and Russia. The Federal Reserve is determined to bring inflation down which could bring aggressive interest rate hikes. Tesla reports that its sales were up 81% from last year. Elon readies his finances to buy Twitter as execs try to stop him. Netflix’s stock takes a nosedive wiping out $50B in the market, and last but not least, an interesting fact.
Let’s get into the news.
Key News This Week:
Market recap
The ongoing conflict between Ukraine and Russia
The Federal Reserve is determined to bring down inflation
Tesla reports an 81% sales increase
Elon prepares to buy Twitter
Netflix’s stock takes a hit of 35%
Interesting fact
Read the Transcript
Hi and welcome to my financial markets’ re-cap for the week.
The market got off to a bullish start for the week, but quickly reversed and fell away. The last 2 days, in particular, were substantial moves down in the indexes. We had no forecasts this week but things are lining up very well for next week. In other words, the market is doing exactly what we want it to do.
That was the system update, what is happening in the news?
The biggest news is of course still, is the ongoing conflict in Ukraine with Russia making clear what their current objectives are. To create a land bridge all the way from Russia to Crimea. This will include controlling the Donbas regions and most, if not all, of Southern Ukraine. With this news, there seems little hope still for a quick resolution to this awful war.
In other news, the Fed Chair stated in a speech at the IMF yesterday that the Federal Reserve is determined to bring inflation down and that could mean that more aggressive interest rate hikes could happen very soon. They went as far as to say that a 50 basis point hike will be on the table at the May meeting. Markets were already bracing themselves for bad news with a decline right into speech time. And his comments didn’t help matters.
In earnings, Tesla, the electric-car leader reported sales were up 81% from a year ago, while profit was up more than 7 times!
Tesla managed to deliver a record 310K cars last quarter, up from 308K the previous quarter. No mean feat considering the challenges in China production. No doubt the Shanghai lockdowns will have at least a small influence on next quarter’s numbers.
Speaking of Elon, this week he said he’s lined up $46.5B in financing to buy Twitter. Twitter execs are taking steps to stop him, but if he is determined enough, it may actually happen.
In other notable earnings this week: Netflix’s stock sank 35% wiping out $50B in market cap — a day after it reported a surprise 200k subscriber loss. This is the first subscriber loss for the company in 10 years. Paramount, Disney, and Roku also took hits on fears that stream fatigue could spread.
Which leads me to this week’s interesting fact:
Netflix estimates that over 100M non-paying households share passwords, and now it’s planning to crack down, how they will do it, who knows, but it’s coming!
That’s it from me, It’s Friday, time to down tools, thanks for watching, and bye for now.