Wall Street has been counting on the number of subscribers of Netflix, which has given it an extreme disappointment. The rate at which the organization was progressing has depleted remarkably, which has also slipped the shares by 14%.
Between April and June, only 5.2 million users have opted for the paid subscription. However, with the addition of the latest shows like 13 Reasons Why, Lost in Space, and Jessica Jones from Marvel, Thomson Reuters I/B/E/S was expecting the number of subscriptions to be more than 6 million.
In a letter to the shareholders, Netflix stated that the 2nd quarter was good but failed to live up to the expectations of the expert analysts. The letter also mentioned that the forecast was more than the reality, which has led to this scenario. Netflix stood in the second position for being the most robust performer on the index of S&P 500. The shares of the company had grown 109%, contributing to the steep hike in the index.
Netflix was at $400.48, which dipped down to $343.60. The Chief Executive Officer of Patriarch, a private equity firm, Eric Schiffer stated that the 2nd Quarter has been disastrous which will also negatively affect the upcoming evaluations.
On the contrary, Wall Street is highly hopeful about the future of the video streaming giant. It believes that with the exponential rise in the demand for this trend, the positive prospect of the business is inevitable. The company is also not stepping back from acquiring a maximum number of paid subscribers. It has planned to spend $2 billion and $8 billion for marketing and programming respectively.
The experts had speculated an addition of 1.19 million subscribers from the US market, which was not met and got stuck at 670,000 users. However, Netflix is hopeful and satisfied with its progress and looks forward to gaining more customers over time.