Is NETFLIX going to keep tanking?

  • Netflix shares are down about 11 percent in after-market trading.
  • The reason Netflix shares are falling is because international net additions were 2.8 million. Analysts thought that number would be 4.8 million.

Netflix shares are tanking almost 11 percent after-hours following the company’s Q2 earnings report on Wednesday afternoon, but before you get wrapped up in false narratives, understand that Netflix trades on international growth.

The reason Netflix shares are falling is because international net additions were 2.8 million. Analysts thought that number would be closer to 4.8 million.

Netflix can sustain its lofty valuation only if global subscriber growth can support increasing content spending and debt. And growth is entirely dependent on Netflix’s prospects internationally, in countries such as India and Malaysia. If Netflix misses by that much — 42 percent — on international net additions, the stock is going to get hammered.

The bigger question is why Netflix missed by that much.

www.cnbc.com/2019/07/17/netflixs-big-problem-worse-than-expected-international-growth.html