Times Square, one of New York's most iconic addresses, became the setting for a Netflix horror movie on Friday, July 17th. More precisely, the Nasdaq, one of the city's landmarks, saw its shares plummet after second-quarter results scared investors.
At the start of the session, Netflix shares fell as much as 12.4%, reaching their lowest level since 2024, trading at US$65.10. Even with the shares reducing losses to around 7% throughout the day, the company is on track to close the trading session with a US$21.5 billion drop in valuation , equivalent to almost the entire market value of Fox Corporation (US$23.5 billion), and more than twice that of Paramount (US$10.3 billion).
In the quarter, Netflix's net profit was US$3.4 billion, 9% higher year-over-year, while revenue grew 13.4% to US$12.56 billion. So far, in line with market expectations.
The shock came from Netflix's projections, which now anticipate weaker revenue growth of around 11.7% for the third quarter.
In the conference call, CFO Spence Neumann tried to downplay the fluctuation, calling it "choppiness"—a kind of temporary bump—and reiterating the projection of 13% to 14% growth for the entire year.
The market didn't buy it. The situation worsened when the company announced it would end the semi-annual publication of data on hours watched. The "What We Watched" report, which was published along with the semi-annual results, will only be released once a year, starting in 2027.
Netflix argued that it wants to maintain its focus on financial indicators. Wall Street took a different view. In the first six months of 2026, subscribers watched more than 97 billion hours of content — an increase of only 2% compared to the same period of the previous year, one of the lowest engagement growth rates in the company's recent history.
However, market pessimism regarding Netflix is nothing new. Since its peak in 2025, the company's shares have fallen by about 45%, resulting in a loss of nearly US$260 billion in market value—an amount greater than the value of Disney as a whole, estimated at around US$160 billion.
Behind the drop lies a question that has divided the market for months: Is Netflix reaching a growth ceiling or is it on the verge of unlocking huge markets? Analysts at Itaú BBA lean towards the more pessimistic side.
"Although the company delivered revenue and profits in line with guidance, expectations were higher given the context of increasing investments, announced price hikes in some regions, new content formats, new games, and expanded advertising formats," they stated in a report.
Analysts at Bank of America also attribute the nearly 50% drop in shares to "investor concerns about the company's appetite for a transformative transaction."
The company tried, unsuccessfully, to accelerate its growth through acquisitions. It lost Warner Bros. Discovery to Paramount Skydance earlier in the year after a bidding war that cost it a $2.8 billion termination fee. Then, in June, it saw Roku—a streaming platform with over 100 million active users—acquired by Fox for $22 billion .
In the conference call, when questioned about possible moves involving Lionsgate or NBC Universal, co-CEO Ted Sarandos was categorical: "We are builders, not buyers." Those who couldn't stomach the horror movie sold their positions.
