CNBC’s Jim Cramer came to the defense of Netflix on Wednesday after the streaming giant’s shares were sold in its first-quarter report.
Shares have fallen more than 7% since the report came out after Tuesday’s close, despite the company beating estimates on the top and bottom lines. Investors were disappointed by lower subscriber expectations and an uncertain short-term future, Cramer said.
“After the incredible performance the company has given us over the years, you have to remember that doubts about Netflix were a mistake every step of the way,” Cramer told Mad Money.
Netflix reported that it has 208 million paid subscribers at the end of March, an increase of 14% over a year ago, in addition to the 210 million expected by the company.
Despite the declining number of subscribers, CFO Spencer Neumann told the conference that “the business remains healthy”, commitment is growing and customer turnover is declining.
“For me, that says ‘please, don’t panic’ … I think they will find a way to start new registrations with mandatory content, whether they create it themselves or have to license it from someone else,” he said. Cramer. “In other words, I agree to Netflix credit for something that doesn’t exist yet, something that will make us feel compelled to subscribe despite the competition.”
Earlier Wednesday, Cramer said Netflix shares could fall to $ 490 a share, although he remains optimistic in the long run. Shares of Netflix closed at $ 508.90 on Wednesday, down 14% from their January highs.