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Netflix: Way More Room to Drop

"Doubled eleven times in 19 years … then cut in half twice"

by Bob Stokes
Updated: June 29, 2022

The glory days of at least one of the FAANG stocks appear to be all but over -- at least for now.

As revenue shrinks at Netflix, more heads have rolled at the subscription-based streaming service of movies and television shows.

A June 23 Variety headline says:

Netflix Begins Second Round of Layoffs, 300 Positions Cut

About a month ago, around 150 employees were let go.

The layoffs are also occurring amid a deflation in the company's stock price.

The May Elliott Wave Theorist provided this chart and eye-opening perspective:

Netflix - Down a Lot - Yet Not So Much

Netflix is down 70% from its high. Many people think it can't go lower. Is this an indication that stocks are near a major bottom?

[The chart] shows the stock's price history. From its low at $0.35 in 2002, Netflix doubled eleven times in 19 years to reach 700.99. Since then, it has been cut in half twice. There is certainly room for more halvings. If you want to monitor the milestones, they are: 700.99, 350.50, 175.25, 87.62, 43.81, 21.91, 10.95, 5.48, 2.74, 1.37, 0.68 and 0.34.

Keep in mind that this is a picture of a stock that has been aggressively bid lower since November 2021. Many stocks are still near highs and have far more room to fall than Netflix.

Since the end of Q1 alone, Netflix's stock is down 53% with a price of $176.32, as of this intraday writing on June 29.

The Elliott Wave Theorist is also keeping subscribers apprised of the stock market's big picture and just know that most investors have no idea of what is likely just ahead.

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