On November 9, the wait for fans of "The Crown" will come to an end. Then the 5th season of the Netflix success series about the British royal family will start. For weeks, the streaming provider's production has been making headlines. Among other things, the alleged thematization of an alleged affair of the Queen's husband Prince Philip, who died in 2021, is stirring things up. The extent to which the makers of the series have reacted to the criticism and deleted scenes or toned them down remains to be seen. What is certain is that "The Crown" will once again attract the masses. In any case, the series is one of the program contents that Netflix is using to justify the outlook for the fourth quarter that it has just presented. CEO Reed Hastings wants to attract 4.5 million net new users. Wall Street had previously expected 300,000 fewer signups.
"We believe we can reaccelerate growth after a challenging first half," Netflix wrote in its latest letter to shareholders. In the first two quarters of 2022, the community of the industry giant had shrunk. For the period from July to September, the company was able to announce an increase in subscriber numbers again. By its own account, Netflix launched some of the most successful series and films in the company's history to date in the third quarter. As examples, executives cite "Monster: The Jeffrey Dahmer Story," the latest season of "Stranger Things" or "Purple Hearts." The company's key financials also exceeded expectations. Netflix posted third-quarter revenue of USD 7.926 billion, up 5.9% from the same period last year. Analysts had expected an average of USD 7.84 billion. Although earnings per share decreased by USc 9 to USD 3.10. Nevertheless, the Californians were able to beat the consensus at this point as well.
As usual, Reed Hastings also used the presentation of figures to address the fierce competition in the streaming market. Netflix, he said, has a much stronger presence among media users than any other provider. For example, in the U.S., 7.6% of total TV time would be allocated to the Californian's programming. This means that Netflix exceeds the quota of rival Amazon by a factor of 2.6, according to the company's own figures. Hastings derives the room for further growth from the still relatively small share of total TV usage. He cites user satisfaction as the key to success. "That's why we've always focused on winning the competition for viewers every day," says the CEO. In addition to new productions, he is now focusing on an additional offering: In November, Netflix will launch a cheaper, ad-supported subscription in twelve countries. In the U.S., "Basic with Ads" is to cost USD 6.99, USD 3 less than the previous basic package.
On Wall Street, Netflix was able to advertise on its own behalf with the interim report. Since publication, the stock gained almost a fifth in value. Despite the rebound, Netflix is still among the 14 members of the NASDAQ-100 Index that have seen their share price fall by more than half year to date in 2022. In terms of historical volatility for the past twelve months, the stock ranks in the top 10 of the technology benchmark. The high price volatility is directly reflected in the terms of the new softcallable barrier reverse convertibles (BRC). Leonteq has launched two Netflix-based variants of the yield enhancement structure. In the product currency CHF, the guaranteed coupon is 16.6% p.a.. Those who wish to allocate the capital in USD can even expect a quarterly payout of 20.2% p.a.. The barrier is a uniform 55% of the initial fixing. As long as Netflix does not fall to or below this level during the term, the issuer will repay the nominal in full. If, on the other hand, the cushion of 45% is not sufficient, the partial protection expires. The investment would then be linked to the performance of the underlying. Please also note the soft callable feature: Leonteq can call and redeem the BRC early.
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