Major Asian stock markets are plunging at once due to the Netflix shock.
As of 8 a.m. on the 21st, Japan’s Nikkei index is plunging 1.39% and Australia’s ASX index is plunging 1.09%, respectively. On the other hand, Korea’s KOSPI is relatively doing well, falling only 0.78%.
The major Asian stock markets plunge is attributed to the sharp drop in futures due to the Netflix shock. Netflix announced below expectations in its earnings announcement shortly after the market closed on the 20th (local time).
Netflix had 8.28 million new subscribers in the fourth quarter of last year, below the Wall Street estimate (8.39 million) compiled by financial information company Refinitiv.
Reuters analyzed that fewer new subscribers than market expectations came out as reflective profits from the COVID-19 incident decreased and competition in the online streaming market intensified.
Netflix’s stock price also plunged as disappointment over its performance was added. According to the New York Stock Exchange, Netflix’s stock price fell 19.8% in overtime trading after its earnings announcement.
Netflix’s sales in the fourth quarter of last year amounted to $7.79 billion, up 16.0% from a year earlier. Net profit rose 11.9% to $67 million.
As a result, NASDAQ futures are also plunging. NASDAQ futures are plunging 0.89% as of 6:30 p.m. on the 20th. This is a larger drop than the Dow 0.23% and the S&P 500 0.48%.
Netflix predicted in its earnings announcement that 2.5 million customers will be added in the first quarter of this year. This is less than half of analysts’ estimate of 5.9 million, less than 3.98 million in the same period last year.
