Why did Netflix stock plummet 35% today? Subscriber numbers hit the wall

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Netflix (NASDAQ:NFLX) stock skated downhill out of today's open and never looked back, finishing down 35.1% and taking just short of $51 billion off the company's Tuesday valuation of $151.5 billion - a reaction to earnings where the company beat profit expectations but sharply underperformed on subscribers, posting its first net loss on that measure in more than a decade.

The last time the stock fell like that? It looks like nearly 18 years ago: On Oct. 15, 2004, Netflix stock slipped nearly 41% - all the way to a split-adjusted $1.47 from $2.49 the session before.

Netflix lost a net 200,000 subscribers for the quarter, and forecast that it would shed 2 million more in the current quarter. That's launched talk of whether the company is saturating its total addressable market - and an earnings call where the company seemed ready to throw a kitchen sink at the problem (including monetizing free-riding viewers and creating an ad-supported tier).

Analysts ran to downgrade and slash targets, noting a potential "sea change" quarter where the company grimly faced up to "every key point of the bear thesis."

Netflix's terrible, horrible, no good, very bad day means it will breach a one-time taboo: It's going to build a layer of the service with lower costs and advertising support to shore up subscriber growth, a move already picked up by smaller streaming rivals including Disney (DIS), HBO Max (WBD), Amazon.com (AMZN), Peacock (CMCSA) and Hulu (DIS) (CMCSA).

As observers processed what could be industrywide bad news for streaming growth, Netflix's competitors felt the brunt today with significant stock price declines as well.