Yesterday Netflix’s stock price plummeted a shocking 35% in a single day behind a bad earnings report.
For the first time in the history of the company they actually lost subscribers.
This is what I meant yesterday when I pointed out that fundamentals eventually win.
Think about every negative story you’ve seen in the news over the last several years about Netflix. There’s been several around content people considered inappropriate or offensive in some way.
But still, their subscriber base kept growing.
Competition has also grown. Amazon streaming, Disney+, Peacock, etc…
All of these services compete – and to date, Netflix has taken on all comers and continued to grow.
However, in this earnings report, Netflix lost customers for the first time and had the worst day for its stock price since 2004 – almost 20 years ago.
What happened?
That’s a complicated question, but let’s check some fundamental data on the economy…
Gas prices in April of 2020 were under $2 a gallon, today we are paying over $4 a gallon.
Food prices are shooting up, rents are on the rise…
And inflation (the CPI) is at 8.5% – may be higher if you listen to some economists.
And at the same time, Netflix is losing customers for the first quarter ever.
That doesn’t surprise me in the slightest.
As I said yesterday, fundamentals always win in the end. The trick for traders is to know how and when to take advantage of anomalies to execute winning trades.
Tomorrow, I am going to share an important lesson we can learn from Netflix about protecting yourself while trading.
In the meantime, let’s see about leveraging the market into personal gains for both of us!
Come trade with me in Options360. Your first month is only $19…
It’ll be the best $19 you’ve ever spent, I promise!
To Your Success,
Steve