Netflix is undeniably on top of the streaming game, and it's never been in danger of other services overtaking or even catching up in terms of popularity. Now, however, the streaming giant got some bad news. Netflix stock has plummeted in the wake of former chief communications officer Jonathan Friedland was fired for the use of a racial obscenity on two separate occasions.
Jonathan Friedland was fired from Netflix on June 22 following the reveal that Friedland had used the N-word on a second occasion. The news broke via a memo to staff from Netflix CEO Reed Hastings, which made it online in full, meaning that anybody and everybody could learn what happened and how Netflix handled the scandal. The big drop in Netflix's market value only days after the news broke may indicate that some stockholders were paying attention to the situation and decided to cut ties with the streaming giant.
The stock market opened on June 25 for the first time since Jonathan Friedland's ousting, and Netflix lost around $12 billion -- yes, billion with a b -- in stock market value in just that one day alone. That drop represents 6.5%, which is a significant number that couldn't have made the brass at Netflix very happy. In fact, it marks Netflix's biggest single-day drop since it announced that it was not going to renew a contract with Epix and would therefore lose the streaming rights to movies like The Hunger Games. That drop took place back in 2016.
All of this said, we shouldn't claim with 100% accuracy that the entire reason why Netflix stock dropped after the weekend is because of Jonathan Friedland's firing. Deadline reports that media shares in the stock market overall dropped by upward of 1% each, even if the 6.5% drop for Netflix is much larger. Even if some of the bad news for Netflix results from the situation with Friedland, a portion of the decline may be due to other factors.
Without in-depth surveys of folks in the stock market whose actions resulted in the plummeting numbers, we can't be entirely certain that Friedland's firing was a key factor. Still, the timing points toward stockholders and buyers getting more than a little spooked at all the negativity surrounding Netflix and how it handled the scandal.
Despite the stock turnout on June 25, Netflix doesn't need to start panicking. Netflix has already had a meteoric year in the market, with stock reportedly rising 100%. As recently as April 24, Netflix's listed market value was $138.3 billion, with trends pointing toward Netflix potentially becoming worth more than Disney in the not-too-distant future despite the fact that the streaming service is slated to spend an incredible $8 billion and increase its debt in 2018. Unless the stock drop turns around, the dream of overtaking Disney may not come true any time soon. We'll have to wait and see.