Netflix Stock Drops as Forecast Misses, Co-Founder Reed Hastings Leaves Board

Netflix’s stock took a bit of a dive recently, with a 9.7% decline following some disappointing second-quarter guidance. This drop almost wiped out all the gains the stock had made so far this year. On top of that, the company shared some big news: Reed Hastings, one of the co-founders who played a huge role in turning Netflix from a DVD rental service to the streaming powerhouse it is today, is stepping down from the board in June.

Despite these bumps, Netflix actually did better than expected in the first quarter. They raked in $12.25 billion in revenue, beating out what the experts thought they would make. And their adjusted earnings per share came in at $1.23, way above the estimated $0.76.

Looking ahead, Netflix’s predictions for the next quarter fell a bit short of what Wall Street was hoping for. Revenue is expected to be around $12.57 billion (compared to the $12.64 billion estimate), and the earnings-per-share guidance is $0.78 (below the $0.84 per share prediction).

After a tough battle to acquire Warner Bros. Discovery, Netflix decided to step back, leaving Paramount SkyDance to take the win. This choice relieved some investors who were worried about the financial strain of the deal falling through.

To keep the business growing, Netflix decided to raise subscription prices. They bumped up their Standard plan by $1 to $8.99 per month, and the Standard (ad-free) and Premium plans by $2 to $19.99 and $26.99 per month, respectively. This move is expected to add about $1.5 billion in revenue this year. Despite the price bump, Netflix CEO Greg Peters believes it’s still a great deal for customers and shows the company’s confidence in their product.

So, while the path ahead might have a few bumps, Netflix is still working hard to bring us all the shows and movies we love.