Broadcast service Netflix reported a decline of 200,000 subscribers for the first quarter of 2022. The first decline in over ten years. Management has already warned shareholders that it expects the number of paid subscribers to fall by 2.1 million in the current quarter. The news hit market participants unexpectedly. The stock price reacted correspondingly harshly to the news. Private and institutional investors parted ways with the newspaper. The stock certificate lost about a third on the day the quarterly figures were announced. This means that losses since the highest historical level of last November have gone to over 72 percent!
However, Netflix CEO Reed Hastings has already taken action. Netflix announced that it would develop a cheaper subscription model with ads. In addition, multiple use of the account by family members and friends should be curbed. According to their statements, the number of password users is about 100 million. The plan provides for the possibility of creating up to two sub-accounts with an additional of several euros. This way, the number of users would not necessarily increase, but the average revenue could increase. A calculation that can work well. As the first quarter figures show, the price increase is reflected in the increase in sales despite the decrease in the number of subscribers.
However, Netflix is still under pressure to invest billions in further growth. Netflix spent about $ 17 billion on content last year, according to Statista. Experts expect the budget for new films in 2022 to be at the same level. In addition to producing its own movies and series, Netflix is currently developing a second pillar. In July 2021, the group announced it would enter the gaming business. Additionally, some smaller game developers have already been purchased and games like Stanger Things: 1984 are now available in the Apple Store. The plan is to be able to offer about 50 games for mobile devices by the end of the year. The gaming business is booming and Netflix can participate with large numbers of subscribers.
According to Thomson Reuters, a large number of analysts are optimistic about the stock in the medium term. With around 220 million subscribers, Netflix is one of the largest streaming services in the world. This year, Netflix was nominated for an Oscar 27 times, though in the end there was only one trophy. However, the broadcasting service won seven awards last year. Last but not least, the corona pandemic led to Netflix & Co. subscribers. to rise in heaven.
However, the high growth rates of recent years have ensured that, in addition to Amazon, competitors such as Amazon, Apple, Warner Brothers Discovery and Walt Disney have long since discovered the broadcasting market and streamed movies, series, documentaries and live shows. room with a click of the mouse. Corona restrictions have now become drastic in many countries. This means: Broadcast time must be reduced. In the face of rising inflation, more and more households are testing their spending. Consumers are rethinking their spending on entertainment, gas and groceries. It’s very easy to give up a broadcast service or two when you are subscribing to five or six. Many services can be canceled on a monthly basis and therefore quickly noticed in the portfolio, and the Netflix service was at the top of the price range after the price increase in January.
Hastings must first regain confidence. Given the uncertainty, high volatility in Netflix stock can be expected in the coming weeks.
Resistance levels: $ 202.70 / $ 245.00 / $ 331.40
Sign of support: $ 165.30
Shares of Netflix fell sharply in mid-April 2022 and is currently still in its final search. With the break of the support level at 202.70 dollars, there is already the risk of continuing the downward movement at 165.30 dollars (resistance level from 2017). There are signs of initial stabilization as the $ 202.70 level is exceeded again. However, the resistance level at USD 245.00 could turn out to be a difficult hurdle on the growth path.
Netflix in USD; Daily schedule (1 candle = 1 day)
Observation period: 14 December 2020 – 28 April 2022. Historical observations are not reliable indicators of future developments Source: tradingdesk.onemarkets.de
Netflix in USD; Daily schedule (1 candle = 1 day)
Observation period: 29.04.2016 – 28.04.2022. Historical observations are not reliable indicators of future developments Source: tradingdesk.onemarkets.de
Reverse Convertible to Netflix Shares (Quanto) for speculation that the stock is moving sideways or moderately up
|Basically||WKN||issue price||base price
||interest rate||Final day of evaluation|
|Netflix||HVB6ML *||100% **||80% ***||6.9% per year||05/10/2023|
* Subscription period until 05/12/2022 (subject of early closure); ** of nominal amount; *** x The reference price at the initial date of the survey; Source: HypoVereinsbank onemarkets; Status: 29.04.2022; ora 10:30
Bonus Cap Certificate on Netflix Shares for speculation that the stock is moving sideways or moderately up
|Basically||WKN||Sale price in euros||Barriers in EUR||Bonus level / cap in EUR||Final Observation Day|
* quantum; Source: HypoVereinsbank onemarkets; Status: 29.04.2022; ora 10:25; Further You can find the products at BMW here.
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Netflix article – stabilization after hitting the number! appeared for the first time on the blog of onemarkets (HypoVereinsbank – UniCredit Bank AG).
Author: Richard Pathenhauer