Netflix had long been making headlines for its bid to acquire Warner Bros. Discovery and the resulting bidding war. However, in the end, Paramount Skydance won the contest and agreed to pay the breakup fee. With the deal between Netflix and Warner Bros. Discovery falling through, not only did the company’s shares rise, but it also benefited from the $2.8 billion breakup fee. 

Despite an impressive week, the situation quickly turned sour for Netflix with the news of co-founder Reed Hastings’s exit and a dip in its share price.

Netflix had an impressive first-quarter earnings report. The streaming giant generated $12.25 billion in revenue, slightly above the expected $12.17 billion, according to Bloomberg consensus data. This was also significantly higher than last year’s $10.54 billion. However, its stock fell more than 8% in extended trading after its second-quarter guidance came in below expectations.

Q2 revenue is projected at $12.57 billion, compared to the expected $12.64 billion. This decline perhaps concerned investors that the company’s growth may be slowing down, according to Bloomberg Intelligence senior media analyst Geetha Ranganathan.

This likely also comes because of the shocking news of the co-founder Reed Hastings' exit, which was shared along with the second-quarter guidance, who is expected to leave the board in June. While such changes are not uncommon, Co-CEO Greg Peters also assured that it is still early in the year. 

"Of course, it's early in the year. There's still plenty of time to go, plenty of work left to go do,” he said, as reported by Yahoo Finance.

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Amidst the stocks falling down, another recent major update was also Netflix’s plan to raise prices, which could help boost its revenue.

Netflix has once again increased its subscription prices in the U.S., making its second hike in under two years. Their ad-supported plan now costs $8.99. And their standard and premium tiers have each gone up by $2. According to the streaming giant, the price increase is intended to fund better content and improve the overall viewing experience.

As reported by Yahoo Finance, Co-CEO Greg Peters is confident about the price hike. And he believes that even with the price hike, it will still be affordable to people. 

"(It) is a great entry point, highly accessible and an incredible value,” he said. 

The company appears confident that its strong content lineup will keep most users from leaving. All in all, it was a strategic move by Netflix. As for how it turns out for the company, it remains to be seen.

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What do you think about the drop in Netflix's stock? Let us know in the comments.