Netflix shares dive as co-founder Reed Hastings steps away
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Netflix chairman Reed Hastings is quitting the streaming service he co-founded 29 years ago, with the company’s stock plunging around 9 per cent on news of his departure.
PHOTO: ALEX GOODLETT/NYTIMES
- Netflix's Reed Hastings is stepping down after 29 years; focusing on philanthropy. Share prices dropped 8% following the announcement.
- Netflix lost a US$72 billion deal with Warner Bros but received US$2.8 billion in termination fees. Earnings per share increased.
- Netflix plans future growth in video podcasts, live entertainment, and technology to improve user experience. Advertising revenue is predicted to increase.
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LOS ANGELES - Netflix chairman Reed Hastings is quitting the streaming service he co-founded 29 years ago, with the company’s stock plunging around 9 per cent on news of his departure.
Mr Hastings, 65, will step down in June to focus on philanthropy and other pursuits, the company said.
His departure comes at an inopportune time. Netflix is searching for new avenues of growth as sales slow due to competition, and after a potentially transformative merger with Warner Bros Discovery fell through in February.
By not following through on the arrangement, Netflix will likely see the storied Hollywood studio and a group of TV properties – including CNN – fall into the hands of Paramount, fundamentally reshaping US media.
It also faces increasing competition from rival streaming services, as well as short-form video platforms like TikTok that vie for consumers’ attention.
The company on April 16 forecast earnings per share in the current quarter to be below analysts’ expectations and quarterly revenue growth that is the slowest in a year, according to LSEG.
“Netflix is growing revenues double digits, expanding margins in 2026 and gushing free cash flow,” said LightShed Partners media analyst Richard Greenfield. “While the first quarter was uneventful financially, the departure of Reed Hastings has spooked investors.”
Netflix co-chief executive Greg Peters said that the company ended 2025 with more than 325 million paid members and entertaining an audience approaching a billion people. “But even given that number, we still have plenty of room to grow into our addressable market,” he said.
Netflix reported profit of US$5.28 billion (S$6.72 billion) for the first quarter, which was boosted by the US$2.8 billion termination fee it received from the failed Warner Bros deal. Earnings per share came to US$1.23, compared with 66 US cents per share in the same quarter a year ago.
Revenue rose to US$12.25 billion, an increase of 16 per cent from the year-ago period, modestly exceeding analyst forecasts of US$12.18 billion.
Netflix, which long told investors that a Warner Bros acquisition was a “nice-to-have, not need-to-have” proposition, highlighted areas of future growth.
The company said its investment in expanding its entertainment offerings with video podcasts and live entertainment – such as the World Baseball Classic in Japan – is fuelling engagement. It plans to use technology to improve user experience and improve monetisation, as advertising revenue remains on track to reach US$3 billion in 2026 – a twofold increase from a year ago. REUTERS, AFP
