Netflix Shares Jump by 17% amid Overwhelming Subscriber Growth

Mar, 2021 - By WMR

On January 20^th, 2021, the shares of Netflix reached a 28-week high at US$ 593/share and closed at US$ 586/share.

American production company, Netflix Inc., gained the momentum in new subscriptions in the fourth quarter of 2020, which helped them to complete a milestone of 200 million subscribers on January 19^th, 2021. The company added 8.5 million new subscribers in the holiday period alone. Yesteryear’s revenue of Netflix stands at US$ 6.64 billion, which is 22% up from the revenue in 2018. The content platform now projects a decent growth in subscriptions in the first quarter of 2021, because the last year saw lockdowns add a miraculous number of subscribers to the company. The pandemic has proven to be a boon for Netflix by an addition of 25.9 million new subscribers to the company.

Netflix has been in debt since 2011 as the content created by the company costs around US$ 15 billion. With other entertainment giants entering the online streaming business, analysts fear the rising debts and interest rates of the company. But the recent performance of the company has encouraged its executives to hope for the better. According to one of the executives of the company ‘the company will be able to generate more internal cash flow and won’t anticipate any external loan to execute its growth strategy.’

Netflix is assured about the future because it has enough content that can be released every weekend of 2021. In October 2020, Netflix increased the price of its monthly subscription pack by US$ 1 to US$ 14. This debt-funded video streaming giant has transformed itself into a revenue-generating business in the last five years.

The online streaming company delivers niche content that has a separate fan-base compared to other entertainment platforms. With low budgets and controlled production scale, Netflix will certainly remain a money-making company.