Five-year performance of Meta and Netflix
Two members of the FAANG group were disarmed.
In the five months since the Nasdaq’s peak late last year, Netflix and Facebook (now Meta) have been crushed, giving up most of the gains they had racked up over the previous half-decade. .
Netflix is down almost 68% since the Nasdaq peak on Nov. 19. Facebook has lost more than 45% of its value since then and is down more than 50% from its peak two months earlier.
In the recent past, both companies seemed to have unstoppable growth and impenetrable moats. Netflix was so embedded in American homes and had so much original content that the company could periodically increase its monthly subscription cost and not miss a thing. Facebook, with its billions of users and dominant ad targeting engine, was sucking up an increasing amount of online ad revenue.
The stories quickly turned and investors reassessed the outlook for companies in the face of increased competition and a deteriorating macro environment.
As of Friday’s close, Netflix had a market capitalization of $99.2 billion, up from over $300 billion in November. Facebook briefly joined the trillion-dollar club last year and is now down to $532.6 billion.
Last week was particularly bad for Netflix. The stock dropped 35% Wednesday, its worst day since 2004, after the streaming company said it lost subscribers for the first time in more than 10 years, and expects to lose up to 2 million more in the current quarter .
Facebook publishes its results next week. The stock has been under pressure since its last earnings report in February, when the company missed user count expectations and warned of increased competition from video apps like TikTok.
Netflix is at its lowest price since January 2018, while Facebook hasn’t been this low since April 2020.
Markets fell sharply on Friday as the prospect of higher interest rates spurred a wave of selling. The Nasdaq fell 2.6%.
Investors who entered Netflix and Facebook a decade ago are still solidly in the green, but new shareholders are hurting. Here are the yields over 10 years, 5 years, 3 years and 1 year:
- 10 years : +1321.77%
- 5 years: +50.85%
- 3 years: -42.88%
- 1 year:– -57.64%