Shares in Netflix have slumped by 35% after it revealed a sharp drop in subscribers and warned millions more are set to quit the streaming service.
It wiped more than $50bn off the firm’s market value as experts warned it faced a struggle to get back on track.
Yet some cast doubt on its plans to boost growth, which include bringing in a free ad-supported service.
It also plans to crack down on password sharing, estimating that more than 100 million non-paying households watch the service this way.
In a sign of the unease, one of America’s best known investors, William Ackman, ditched his $1.1bn investment in Netflix on Wednesday, taking a loss of more than $400m.
His hedge fund Pershing Square Capital Management had bought the shares just three months ago.
In a brief statement, Mr Ackman said that while Netflix’s plans to change its business model made sense, investing in the company felt too risky.
In a trading update on Tuesday, Netflix said its total number of subscribers had fallen by 200,000 in the first three months of 2022, falling well short of its target.