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Netflix shares set to lose $40 billion after subscriber shock

The streaming service surprised investors by losing 200,000 customers in the first quarter

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Shares of Netflix Inc. are set to shed an estimated US$40 billion in value on Wednesday after the streaming giant announced its first customer slump in more than a decade.

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Shares of the company fell 26% in premarket trading, extending its fall this year to 57%. If the losses hold, Netflix is ​​poised to become the worst-performing stock this year in the tech-heavy S&P 500 and Nasdaq 100 benchmarks.

The streaming service shocked Wall Street by losing 200,000 customers in the first quarter, the first time it has lost subscribers since 2011. It also forecast that it will drop another 2 million customers in the second quarter.

“A big problem with Netflix is ​​that it’s too easy to leave the service,” said Russ Mould, chief investment officer at AJ Bell. Consumers feeling the pinch of inflation will watch their spending, and streaming services are a quick way to save money.