The market is dominated by investor sentiment. Fundamentals only matter as long as the market decides that they matter. For example, many tech stocks were loss-making in 2021, yet their share prices rocketed to stratospheric levels.
This year, investors decided that Netflix should be ‘cash flow positive’ and punished it for a loss in subscribers and not taking drastic action earlier. Investors are also spooked by the increased competition and a potential slowdown in consumer spending.
However, things have stabilised somewhat. Netflix’s top-line revenue by quarters did not crater. P&L continues to hum along. After such a drastic fall in sh...