Shares of Netflix (NASDAQ:NFLX) 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%.
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.
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.
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.