Major stock losses at Netflix and Tesla drove the tech-heavy Nasdaq down nearly 300 points on Thursday, the index’s worst day in five months as a pair of earnings reports raise doubts about their valuations, even as the Dow Jones Industrial Average continues to climb.
Shares of Tesla and Netflix both fell roughly 9% on Thursday, dragging down the tech-heavy Nasdaq.
The Nasdaq’s drop of nearly 295 points on Thursday marked a 2.1% single-day drop, its biggest percentage decline since February 21, when it fell 2.5%.
Shares of Netflix fell 8% on Thursday, closing the day at $437.42 after the streaming service reported worse-than-expected second-quarter revenue, even as it racked up nearly 6 million subscribers thanks in part to its crackdown on password sharing.
Netflix’s second quarter revenue of $8.2 billion narrowly missed analysts’ projections of $8.3 billion—the company also projected $8.5 billion in revenue over the third quarter, again below analysts’ projections of $8.7 billion.
Tesla’s stock slid nearly 10% on the day to $262.90 after an earnings report prompted analysts to doubt the automaker’s $840 billion valuation, with Roth analyst Craig Irwin telling Yahoo Finance the automaker’s months-long rise in shares prices made for an “egregiously overvalued” stock, despite its quarterly earnings beating consensus forecasts with $24.9 billion in sales over the second quarter.
Tesla’s drop in stock marked the company’s worst performance since April 20.
$19 billion. That’s how much billionaire Tesla owner Elon Musk lost on Thursday as a result of Tesla’s dip on Wall Street, though Musk still holds the title of world’s richest person, with a net worth of $237.7 billion, according to Forbes’ real-time list of richest people.
Netflix’s drop comes after the streaming giant cut its cheapest ad-free plan for new customers in the U.S. and U.K. as it looks to push new customers toward more expensive ad-free plans or cheaper ad-based options, a move the company had for years sworn off. The change, which does not affect existing customers, eliminates Netflix’s $9.99 per month “Basic” ad-free plan, meaning new customers choose between a $6.99 plan with ads or a $15.49 or $19.99 plan without them.
Netflix Shares Fall 9% After Missing Revenue Projections (Forbes)
Elon Musk Got $18 Billion Poorer Thursday As Tesla Stock Faltered (Forbes)