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.
Netflix faces intense competition from streaming rivals, but was also hit after it raised prices and left Russia.
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.
“While Netflix’s business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty,” he wrote.
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.
