Netflix Weakens on Growth Slowdown

Netflix (NASDAQ:NFLX) shares are down Friday after the company quietly admitted in its fourth-quarter earnings that streaming competition is eating into its growth. If it remains down more than 20% until close it will be Netflix’s worst day since Oct. 16, 2014, when shares fell 19.3%.

Despite beating analyst expectations on the top and bottom line and in user numbers for the quarter, the admission seemed to rock investors. Netflix executives have infamously pointed to things like sleep as potential competitors, claiming anything else users could be doing with their time is competition. But even as the streaming wars heated up with Disney (NYSE:DIS) and even NBCUniversal (NYSE:US) entering the mix, Netflix leaders mostly maintained resolved about the new competition.

"While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched," the company said in its shareholder letter on Thursday.

The question of competition is even more crucial given Netflix raised prices just last week in the U.S. and Canada, raising its standard plan from $13.99 to $15.49. With other alternatives, higher prices could become a trickier gamble.

Piper Sandler analysts, which maintained an overweight rating on the stock while cutting its target price from $705 to $562, wrote in a note Friday that it still "remains early days" for subscriber growth opportunity overall.

NFLX shares thundered lower $112.55, or 22.1%, to $395.70.