Is it a good idea to acquire Netflix stock?

22 Apr 2022

Following the company's first-ever subscriber decline in the streaming era, Netflix stock fell by a staggering 35 percent yesterday. 

That's the equivalent of Netflix losing $50 billion in market value every day.

For the record, this isn't an isolated incident. The company has lost $200 billion in market value in five months. 

Netflix stock has now lost all of its gains during Covid-19, despite its pandemic demand. 

Indeed, since the beginning of 2018, the stock has essentially gone nowhere.

Many investors aren't sure whether now is the right time to buy Netflix shares.

It's not like Netflix is going away any time soon.

This hyper-growth darling of Silicon Valley has changed the way you and I watch TV and movies. 

It's available in nearly every home in the United States. 

We can't get enough of its films, and we can't get enough of its television shows.

Even though all of this is true, you should not invest in Netflix stock at this moment.

The growth story has reached its peak. 

The best days for the corporation are behind it. 

Netflix stock will grow at a snail's pace over the next few years. 

And in fact, NFLX was so richly valued in late 2021 that it's still overvalued for snail-like growth.

The loss of Netflix's stock does not mean that the rest of the IT industry is in danger. 

Not at all. Streaming service Netflix has a lot of difficulties. 

Meanwhile, the rest of the IT industry, including several streaming TV services, is booming.

What does this mean in terms of money?

Netflix's stock should be ignored. 

It isn't very helpful. Instead, keep an eye on another TV-streaming company displacing Netflix's users.

What Went Wrong With Netflix's Stock?

Many investors are undoubtedly scratching their heads right now, wondering where Netflix went wrong. 

What happened to make things this bad? 

If you lose 2 million members in a quarter after attracting millions of new subscribers every quarter for many years, you made some mistakes.

What exactly went wrong?

Netflix, to be honest, became complacent as the competition in the TV streaming market caught up with them.

In light of Netflix's history of pioneering new concepts, it's worth noting.

Subscription DVD mail services were pioneered by the firm.

Netflix was the first to establish a TV-streaming service when internet TV began to take off. 

There's no denying that Netflix is a huge hit. When Amazon Video entered the market, the corporation stepped up its investment in producing original content.

And it's been a big success because of that.

Stranger Things, which premiered in the summer of 2016, was the catalyst for the shift to the original content. Since then, what has Netflix accomplished?

I'm guessing that the company has improved the quality of the video. They've created some material in a language other than English. 

They have done testing games and other interactive content.

I'm not trying to offend anybody. Squid Game was one of my favorite video games growing up. 

However, the addition of non-domestic material, better picture quality, and a few half-baked interactive films do not represent innovative breakthroughs. 

As a result, Netflix has not introduced any new features in the last six years. 

Instead, it's chosen to follow in the footsteps of previously published work.

Netflix was not the first media company to establish a streaming service with original content; several others followed suit. 

There are other subscription services that you may choose from HBO Max, Disney+, Apple TV+, and Roku Channel.

The Complacency of the Company

All new entrants to the TV-streaming industry have created original material during the last five years.

There is no longer a disparity in playing fields. Instead of expanding like a wildfire, Netflix is now battling tooth and nail to hold on to its users.

And yet, Netflix stock still hasn't been priced for this kind of circumstance.

Netflix must, of course, ultimately pioneer a new revolutionary idea as the answer to this problem. 

The issue may be with virtual reality material. Perhaps Reed Hastings' openness to create an ad-supported tier is to blame. Working with a game developer might be an option.

I have no idea what will happen. 

You can count on Netflix to take action (it's in their DNA). 

It will take some time for "something" to be produced, get traction, and speed up the growth story again.

Briefly stated: Netflix stock is now worthless

But this does not imply that all IT and TV-streaming companies are worthless, as the market seems to believe. 

Our research reveals that TV-streaming companies are flourishing while Netflix continues to struggle, despite their stock prices falling on Wednesday. 

This provides a compelling purchasing opportunity for a TV-streaming company, in our opinion.

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