UPDATED: Shares of Netflix took a hit Monday, dropping more than 6% in morning trading, as investors apparently reacted to a range of events including a potential trade war with China and the ouster of the company’s chief communications officer.
The pullback comes after the stock hit record highs last week — closing at $411.09 per share Friday — and the drop could reflect profit-taking by investors in the high-flying stock. On Monday, the stock opened down 1.6% and had dropped 6.6% at $384.30 per share as of 12:20 p.m. ET. Netflix shares closed at $384.48 per share, down 6.5%, the stock’s biggest decline in two years.
Broader market indices were down in the 1%-2.6% range, after the Trump administration was reported to be setting plans to prohibit many Chinese firms from investing in the U.S. technology sector and by blocking more technology exports to Beijing, according to the Wall Street Journal.
Also Monday, ProSiebenSat.1 and Discovery announced a partnership to launch a German TV subscription-streaming platform that would combine ProSieben’s Maxdome VOD service and Discovery’s Eurosport Player — representing a new challenge to Netflix in Germany.
In addition, on Friday chief communications officer Jonathan Friedland was fired over racially insensitive remarks he’d made in company meetings. News of Friedland’s ouster broke near the close of trading on June 22.
In a memo to staff, Netflix CEO Reed Hastings said Friedland’s “descriptive use of the N-word on at least two occasions at work showed unacceptably low racial awareness and sensitivity, and is not in line with our values as a company.”
Meanwhile, on Sunday the streaming giant aired a brand image ad, dubbed “A Great Day in Hollywood,” during the BET Awards telecast that highlighted black artists who work with Netflix.