Netflix Stock Walloped As Wall Street Questions Its Post-Warner Path

Netflix stock fell 10% Friday, with many Wall Street analysts raising questions about the company’s strategic direction.

The company’s first-quarter results, released after the close of Thursday trading, beat expectations for revenue and earnings, but its financial guidance for the second quarter undershot analysts’ forecasts. That shortfall and the news that co-founder and longtime ex-CEO Reed Hastings is leaving the board of directors and ending his three-decade association with the company he co-founded, sent shares down after hours Thursday.

The slide continued Friday despite gains in the broader market, with trading volume in Netflix shares at nearly twice normal levels, and shares hovering at around $97 in the session’s final hour. The tumble reversed momentum that had pushed the stock up more than 15% for the year heading into earnings. Many analysts noting the stock’s run-up due to news in March of price increases and a general sense of relief that the company wouldn’t be encumbered by a massive acquisition of traditional assets. After offering $82.7 billion for Warner Bros. Discovery’s studios-and-streaming business, Netflix bowed out in February and WBD accepted a richer bid from Paramount for the entire company.

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