Shares of Netflix fell nearly 10% on October 22 after the company reported quarterly results that matched revenue expectations but missed on operating income. Revenue was $11.51 billion, in-line with estimates, while operating income came in at $3.24 billion which is about $400 million below what Netflix had forecast. A major contributor to the shortfall was a $619 million settlement of a tax dispute in Brazil. The drop marked the biggest single-day decline for Netflix since April 2022.
In addition to the earnings miss, Netflix’s stock had already begun to take pressure after Elon Musk publicly called on his followers to cancel their subscriptions. Early in October, Netflix shares slid about 2.3% one day and 2.9% the next following Musk’s posts, marking consecutive declines. Over a full week, the stock dropped almost 5%, its worst weekly performance since April. Reports estimate that the company lost over $15 billion in market value in just one to two days after the boycott momentum grew.
So rather than a single reason, the weakness appears to reflect a mix of disappointing fundamentals + heightened sensitivity to public-relations and subscription risk. The Musk boycott call may not by itself drive long-term damage, but it seems to have amplified the volatility and increased investor caution at a moment of weaker financial numbers.