Netflix's loss of $54 billion in market cap amid a plummeting stock marked the biggest one-day drop in history.

In the U.S., Netflix added 670,000 streaming subs for the quarter — compared with 1.52 million domestic additions in the year-ago quarter — to end with 58.5 million domestic customers. Internationally, Netflix had 2 million net adds for the most recent quarter (versus 5.12 million last year), bringing its total international member base to 79.8 million.

Netflix said it expected to add 700,000 domestic streaming subs in the third quarter (a big drop from 2.1 million additions in Q3 2018) and 5 million internationally, which would be a slight uptick from 4.47 million in 2017. The company had $393 million in negative free cash flow for the latest quarter, down slightly from $384 million in the year-ago period. "We expect negative free cash flow to continue to be elevated through most of 2019," Netflix said. "While we do have some short-term flex on our quarterly cash flow depending on the timing of content spending, taxes, and working capital, we expect our full-year negative free cash flow (FCF) to be around our previous guidance range of $3 billion to $4 billion."'

Netflix shares sank to a more than four-year low — its lowest since shares closed at $220.46 on Jan. 19, 2018 — after the company posted a Q1 loss of 200,000 subscribers and projected that it will lose another 2 million subs in Q2, prompting a wave of analyst downgrades. Netflix shares have shed 65% of their value over the last six months. Netflix shares plummeted to their lowest point since January 2018 as investors reacted to the streamer’s first subscriber loss in more than a decade — bringing years of booming growth to a screeching halt. The second-biggest drop came in January, when it saw $49 billion in market cap shaved off after Q4 subscriber adds came up short and Netflix warned of slowing growth — after the company posted a Q1 loss of 200,000 subscribers and projected that it will lose another 2 million subs in Q2, prompting a wave of analyst downgrades. Netflix shares have shed 65% of their value over the last six months.

Netflix shares plummeted to their lowest point since January 2018 as investors reacted to the streamer’s first subscriber loss in more than a decade — bringing years of booming growth to a screeching halt.

Ackman said he sold his Netflix holdings after determining that at the current stock price the firm would be selling the shares at a profit, though one below what it had expected.

"We congratulate Netflix on the success of their platform and have enjoyed our investment in the company. As value investors, we are inherently capital-constrained and must be disciplined in what we sell as well as what we buy," Ackman said. Pershing Square Capital Management LP reported a $1.16 billion loss on its Netflix holdings in the fourth quarter, bringing its total loss to $722 million at year-end.

The move is a significant reversal for Ackman, who has been a fierce defender of his stake in the company even amid huge losses stemming from disappointing subscriber numbers earlier this year that sent the stock plunging 34% over two days at one point last summer.

Reed Hastings, co-CEO of Netflix, blamed the subscriber shrinkage on “great competition” and said that Netflix had an estimate of more than 100 million households using Netflix without paying. The company also faced investor concern that its streaming service was nearly fully penetrated globally after the roll-out of its original content strategy (called "COVID"). Netflix's flywheel has slowed substantially and it will take time to get it going again. This would create substantial uncertainty around the name for at least the balance of '22.

“Netflix’s admission that over 100 million freeloaders—including 30 million in the United States and Canada—are accessing content that they have not paid for is further evidence that the company has hit maturity in key markets,” MoffettNathanson principal analyst Michael Nathanson wrote in a note to investors. The company acknowledged intensifying competition from Hulu, Redbox, Amazon, and other streaming companies—and told investors it expects to grow its share of viewing while decelerating the rate at which it spends on content. “We question how well Netflix can do that in a world where everyone wants to take market share by spending more on content,” Nathanson observed.

On Wednesday, Netflix disclosed that it had lost 200,000 subscribers in its latest quarter, bringing its total number of global members to 221.64 million. On Thursday, Netflix revealed that it now expects to lose 2 million subscribers in its next quarter.

In a report released on December 10, 2014, the Wall Street Journal Markets reported that the proportion of investors who had bought stock in Netflix, Inc., had more than doubled over the past week and a half when compared to figures from the previous week or figures from a month earlier. Global brokerage firm Bank of America Securities also reduced its target price for Netflix by more than half to $300 from $605. Although the current scenario remains gloomy, some analysts think the company has the potential to succeed in the long run.