Shares of streaming platform Netflix have tumbled almost 5% over the past 5 trading sessions ever since Tesla CEO Elon Musk has started urging his followers to boycott the company and cancel their subscriptions.Netflix shares fell on Friday, marking their biggest weekly decline since April, even as the broader market rallied. Though major indices rose about 2% to new highs, the streaming giant lagged behind tech peers like Amazon (AMZN) and Meta (META), according to Yahoo Finance.Musk has used his platform on X to call on consumers to cancel their Netflix subscriptions, criticising the company for including alleged transgender messaging in children’s programming. Why is Musk not watching Netflix?This week, Elon Musk urged his followers to cancel their Netflix subscriptions amid a controversy surrounding an animated show and its creator. Musk posted on X, “Cancel Netflix for the health of your kids.” His post responded to an image claiming Netflix was promoting a “transgender woke agenda.”The backlash centres on the animated Netflix series Dead End: Paranormal Park, which featured a transgender character and was cancelled in 2023 after two seasons. In addition to sharing several anti-trans posts, Musk also reacted to a post criticising alleged statements by the show’s creator, Hamish Steele, which a prominent conservative X account said “mocked” the murder of activist Charlie Kirk.The post came after Libs of TikTok shared screenshots from a Netflix report showing a rise in non-white directors and lead actors across its programmes.ProfitsNetflix is preparing to release its third-quarter earnings later this month. The short-term effect of the boycott may be hard to gauge, as the company no longer reports subscriber numbers every quarter.In its most recent report, Netflix beat Wall Street expectations and raised its full-year revenue forecast. The company expects third-quarter revenue of $11.53 billion and earnings per share of $6.87, above analysts’ initial estimates. For the full year, Netflix now projects revenue between $44.8 billion and $45.2 billion, boosted by ad-supported tier growth, favourable foreign exchange movements, and steady user engagement.Executives have said ad sales are on track to roughly double to $3 billion next year, with new seasons of hit shows such as Wednesday, Stranger Things, and Squid Game, alongside expanded live sports offerings, expected to maintain momentum.Netflix has weathered similar controversies in the past. In 2020, the film Cuties sparked bipartisan outrage over alleged sexualisation of children, leading to a surge in cancellations. Yet the company managed to maintain its subscriber base and continued growing in the following years.
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