Shares of Netflix (NFLX) saw a decline on Friday, marking their largest weekly drop since early April. The stock dipped nearly 5% during the week ending Friday as Tesla’s (TSLA) CEO Elon Musk has been vocal in encouraging a boycott against the streaming service.
In contrast, the overall market has performed better, which has appreciated approximately 2% to reach new record levels this past week, and Netflix has also fallen behind tech giants such as Amazon (AMZN) and Meta (META).
The decline follows Musk’s intensified calls for a boycott, where he urged his 227 million followers on X to cancel their Netflix subscriptions, alleging that the platform promotes supposed transgender themes in children’s content.
In recent days, Musk has shared multiple posts criticizing Netflix’s offerings: “Cancel Netflix for the health of your children,” he tweeted on Tuesday.
Netflix has not issued a response to Yahoo Finance’s inquiries.
Musk’s advocacy for the boycott comes as the company is set to release its third-quarter earnings report later this month. With Netflix no longer disclosing subscriber numbers regularly, the short-term repercussions of a boycott could be challenging to measure.
In the latest earnings report, Netflix exceeded Wall Street’s expectations and raised its revenue forecasts for the year, although results fell short of what many analysts had deemed a high-performance threshold.
The company anticipates third-quarter revenues of $11.53 billion and earnings per share (EPS) of $6.87, both above initial expectations. For the full year, Netflix expects revenues between $44.8 billion and $45.2 billion, indicating robust growth in its ad-supported tier, favorable foreign exchange conditions, and consistent user engagement.
Executives have projected that ad revenue could nearly double to $3 billion next year, while new seasons of popular shows like “Wednesday,” “Stranger Things,” and “Squid Game,” in addition to an expanded sports lineup, are expected to help maintain growth.
This isn’t the first instance of Netflix being in the spotlight due to social media controversies. Back in 2020, the service faced significant criticism from both sides of the aisle after the release of the French film “Cuties,” which many accused of over-sexualizing young girls.
Subscription analytics firm Antenna reported a fivefold increase in cancellations, while YipitData indicated that subscription churn reached a multi-year high. The hashtag #CancelNetflix trended for several days. Nevertheless, the company managed to navigate that controversy with minimal long-term impact on its subscriber numbers.
