Netflix stock sinks after reported ad target miss as analysts warn of ‘competitive disadvantage

Netflix (NFLX) Stock closed Thursday’s trading session down nearly 9%, the biggest intraday drop since April, after a new report from Digi day said the streaming giant is falling short on viewership guarantees it made to advertisers for its new ad-supported tier.

According to Digi day, which cited five agency executives, Netflix is now allowing ad buyers to take their money back after missing viewership targets. The company reportedly only delivered around 80% of the expected audience.

Netflix’s drop also came during a challenging day for the broader market, with the Nasdaq falling 3% and the S&P 500 losing 2.5%.

However, the news doesn’t appear to be as bad as it sounds. Not all advertisers have requested refunds, and the main reason why some have asked for their money back was simply to reallocate their funds away from holiday ads they had booked with Netflix.

It’s also worth noting that this is part of Netflix’s approach to advertisements, where companies only pay for the viewers, they reach. As a result, money is only being refunded for ads that have yet to run.

The specific shortfall amounts vary by the advertiser, but in some cases, Netflix has fallen short by about 20% in terms of audience viewership promised, company executives told Digi day. A Netflix spokesperson declined to comment.

NETFLIX TECHNICAL ANALYSIS DAILY CHART:

In the daily chart, Netflix is currently is trading in up channel. Netflix is currently trading below all SMA.

RSI is in the selling zone which shows bearishness. And stochastic is suggesting a downtrend.

Netflix’s immediate support level is at 286.36 & resistance level is at 301.60

HOW TO TRADE IN THIS WEEK

Netflix is trading in a down channel; it will continue to trade downside until any reversal. So, remain bearish on it.

TRADE SUGGESTION: SELL AT 290.10, TARGET AT 282.26, SL AT 296.30