Netflix (NASDAQ: NFLX) is losing market share to be sure -- but consider the circumstances. It was the first company to make streaming video a mainstream phenomenon, and for years, it was the only serious name in the business. It's only natural that the recent launches of big rival services such as Disney's (NYSE: DIS) Disney+ and AT&T 's (NYSE: T) HBO Max would chip away at Netflix's share of the on-demand video space.
But there's room for more than one winner in this business, and Netflix's market-leading 204 million paid worldwide subscribers is still only a fraction of its total addressable market. Shareholders need not ramp up the anxiety levels just yet.
Stock-picking can be a funny business. Sometimes investors may use all the wrong reasons to mentally justify why a company deserves to be priced at a steep premium, but then quickly change their minds with little to no warning when circumstances shift.
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Netflix Is Losing Market Share, but This Is the Actual Risk to Shareholders