To The Moon

$Netflix(NFLX)$

Netflix earning highlight was always the growing numbers of subscribers. BUT as of yesterday, no more! For the first time in a DECADE Netflix is repprting losing of subscribers. 

With the news, Netflix crash more than 25% pre market. 

Netflix loses 200k subscribers in Q1 and it blames 

1) suspending of Russian service about 700k member 

2) strong competition especially in the US From Disney,prime etc. 

For #1 if we exclude that we still have net gain of subscribers but is still small compare to previous millions in growth. 

If we dive deep, #2 is the problem. With the competition, Netflix no longer have a good moat, or should say Netflix don't have a moat! 

In the past Netflex have great competitor advantage:

1) first mover advantage

2) unique content

3) no ad 

But with increasing competitor in term of price, content, Netflix is starting to feel the pain. 

What worse, Netflix predict it will further losing more subscribers in the next quarter to as much as 2 million. 

So should you buy the DIP? For me I will wait and see approach, with the current inflation environment which is bad for growth stock and Netflix not growing as quickly, we want to aoivd catching a falling knife. 

But if Netflix can expand their revenue stream and built on top of their business in gaming, merchandise etc. 

A naturally next step that Netflix is already working on and if they can spun that off successfully then maybe Netflix grow story will continue..