Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Vodacom’s Maziv deal gets makeover ahead of crucial hearing

      18 July 2025

      Takealot taps Mr D to deliver toys, pet food and future growth

      18 July 2025

      Cut electricity prices for data centres: Andile Ngcaba

      18 July 2025

      ‘Oh, Ani!’: Elon’s edgy bot stirs ethical storm

      18 July 2025

      Trump U-turn on Nvidia spurs talk of grand bargain with China

      18 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Samsung’s bet on folding phones faces major test

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      OpenAI to launch web browser in direct challenge to Google Chrome

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025
    • In-depth

      The 1940s visionary who imagined the Information Age

      14 July 2025

      MultiChoice is working on a wholesale overhaul of DStv

      10 July 2025

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025
    • TCS

      TCS+ | Samsung unveils significant new safety feature for Galaxy A-series phones

      16 July 2025

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025
    • Opinion

      A smarter approach to digital transformation in ICT distribution

      15 July 2025

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Investment » Covid dividend ends as likes of Netflix, Zoom crash back to earth

    Covid dividend ends as likes of Netflix, Zoom crash back to earth

    By Agency Staff21 April 2022
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    The collapse of Netflix shares on Wednesday after the company reported its first loss of customers in a decade is the latest drastic sign that US investors are abandoning streaming services and other pandemic winners and questioning whether they still merit growth stock valuations.

    With Netflix shares tumbling 37% after the entertainment heavyweight’s disastrous quarterly report late on Tuesday, its stock market value has now fallen by two-thirds from its peak of over US$300-billion late last year.

    Netflix’s market capitalisation now stands at about $100-billion, by far the smallest among the so-called Faang group of stocks — which also includes Facebook-owner Meta Platforms, Amazon.com, Apple and Google-owner Alphabet — that fuelled much of Wall Street’s rally in the years prior to the 2020 Covid-19 pandemic.

    Peloton Interactive, Zoom Video Communications and Pinterest have all tumbled in recent months

    Facebook-owner Meta Platforms, the next least valuable Faang company, was worth about $550-billion on Wednesday, with its stock dropping about 7% as investors dumped a range of former stay-at-home winners in the wake of Netflix’s report.

    Portfolio managers who focus on high-growth stocks with pricey valuations may reflexively snap up Netflix’s deeply discounted shares following Wednesday’s selloff, putting aside the company’s increasingly difficult challenges with market saturation, password sharing and uncertainty in markets such as Ukraine and Russia, predicted Jim Bianco, president of financial market research firm Bianco Research in Chicago.

    “I think it’s going to take some time for them to start to recognise whether or not Disney and Roku and Netflix and Hulu and Paramount might not be growth companies any more, that they might have hit their saturation point,” Bianco said.

    Netflix’s poor report and stock selloff impacted other streaming-related shares: Walt Disney fell 5.8%, Paramount Global dropped 8.1%, Warner Bros Discovery fell 5.2% and Roku lost 5.8%.

    Lost ground

    Walt Disney’s video steaming service pushed Disney’s stock higher immediately after it was unveiled in 2019 and helped the theme park operator weather pandemic-related shutdowns. However, after peaking a year ago, Disney’s stock has steadily lost ground and it is now trading at levels below when Disney+ was unveiled.

    Disney’s venture into video streaming lifted its forward price:earnings valuation to levels similar to Netflix’s in 2020, with Disney’s PE briefly reaching as much as 72 at a time when Netflix was valued at 58 times earnings, according to Refinitiv data. But both companies’ PEs have since fallen in tandem, reflecting tougher competition as more streaming services entered the market and the increasing financial burden of producing top-tier content to attract and keep customers.

    Other companies that benefited during the pandemic have also given up more of their gains in recent months as consumers venture out of their homes and shift their spending habits. Peloton Interactive, Zoom Video Communications and Pinterest have all tumbled in recent months and are now down more than 60% over the past 12 months.

    While competition is growing across the streaming industry, Truist analyst Matthew Thornton believes Netflix is the most vulnerable because it is the largest and most well-established. “They’ll feel it more than an emerging challenger,” he said.

    While Disney has also been hurt by pulling out of Russia because of the war in Ukraine, Thornton said the impact has already been well telegraphed to investors. Analysts on average expect Disney to report a 29% year-over-year jump in revenue to $20.1-billion when it provides its quarterly results on 11 May, according to Refinitiv. Analysts expect it to report a March-quarter net profit of $1.8-billion, almost double from a year ago.  — Noel Randewich and Sinead Carew, (c) 2022 Reuters



    Disney Netflix Peleton Interactive Pinterest Zoom
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleMusk in line for $23-billion in new compensation
    Next Article Rand continues to plunge as load shedding exacts a toll

    Related Posts

    Netflix premieres first AI-generated scene

    18 July 2025

    MultiChoice: We can’t afford to compete without help

    17 July 2025

    Apple is said to be eyeing Formula 1 broadcast rights

    9 July 2025
    Company News

    Vertiv to acquire custom rack solutions manufacturer

    18 July 2025

    SA businesses embrace gen AI – but strategy and skills are lagging

    17 July 2025

    Ransomware in South Africa: the human factor behind the growing crisis

    16 July 2025
    Opinion

    A smarter approach to digital transformation in ICT distribution

    15 July 2025

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.