Netflix shares fall another 4% premarket after Bill Ackman dumps stake and New Constructs predicts another 50% decline

Netflix Inc. shares slid another 4% premarket Thursday, continuing the rout that was sparked by its weaker-than-expected first-quarter earnings that showed it losing subscribers for the first time since its infancy and a forecast for a loss of 2 million in the current quarter. The stock slid 35.1% Wednesday to mark its steepest single-day percentage decline since it fell a record 40.9% on Oct. 15, 2004. Netflix avoided closing with a market value below $100 billion but it still shed a stunning $54.3 billion in market capitalization on the day, according to Dow Jones Market Data. David Trainer, CEO of New Constructs, an independent equity research firm that uses machine learning and natural language processing to parse corporate filings and model economic earning, said the stock could fall another 50%. “Strong competition is taking market share, limiting pricing power and making it clear that Netflix cannot generate anything close to the growth and profits implied by the current stock price,” he wrote in commentary for MarketWatch. Billionaire investor Bill Ackman, meanwhile, sold his hedge fund’s entire stake just a few months after announcing he had acquired it and said the losses have reduced year-to-date returns by four percentage points.

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