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Why Netflix Fell 6.9% Today

By Rich Duprey - Jan 27, 2021 at 4:20PM

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After last week's impressive performance, the streaming leader got caught up in Wall Street's negative mood.

What happened

Shares of Netflix (NFLX -5.04%) dropped by 6.9% in trading Wednesday as the broader market tumbled. The Dow Jones Industrial Average closed the session down by just over 2% while the S&P 500 was off by 2.6%.

So what

If Netflix was a heavily shorted stock, it might have bucked the day's trends. Stocks like GameStop, Bed Bath & Beyond, and AMC Entertainment rocketed higher despite the overall market sell-off. Fewer than 2% of Netflix shares are sold short, however.

Woman with laptop in front of dozens of video screens

Image source: Getty Images.

Still, shares of the leading video streaming service surged 17% last week after Netflix delivered a quarterly report that showed it had bulldozed its way through the 200 million subscriber mark. In light of the weakness on Wall Street Wednesday, it's not surprising that Netflix gave back some of those recent share price gains.

Now what

Netflix has proven it still knows how to grow, even in the face of stiff competition from the likes of Disney and AT&T, which is putting a lot of energy into ensuring its HBO Max service becomes a viable competitor.

There will be up and down days with any stock, and while gaps down like this one can be distressing, in the long run Netflix should still be a winning investment.

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$179.60 (-5.04%) $-9.54
The Walt Disney Company Stock Quote
The Walt Disney Company
$95.92 (-0.71%) $0.69
AT&T Inc. Stock Quote
AT&T Inc.
$20.61 (-0.82%) $0.17
GameStop Corp. Stock Quote
GameStop Corp.
$124.38 (-4.09%) $-5.31
Bed Bath & Beyond Inc. Stock Quote
Bed Bath & Beyond Inc.
$6.53 (-3.26%) $0.22
AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
$13.38 (-5.31%) $0.75

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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