Netflix shares down after Musk backs boycott idea. Are they worth buying?

Shares of video service Netflix fell by more than 2% in trading on October 1. The securities may have been affected by the statements of Elon Musk, who supported in the social network X calls for a boycott of the streaming giant: the head of Tesla offered to refuse subscriptions "for the sake of children's health". Analysts are not yet sounding the alarm about the company's securities. But Goldman Sachs a day earlier kept them neutral rating and lowered the target price, however, still expecting growth of about 8%.

Netflix shares were down nearly 3% at one point in trading on Wednesday, October 1, before slowing slightly to about 2.3%.

The reason for investors' pessimism could be Tesla CEO Elon Musk's posts on social networking site X. He reposted another user's post that said he was canceling his Netflix subscription and added, "Same".

In addition, Musk wrote, "Cancel [subscriptions to] Netflix for the health of your children." With these words he accompanied a repost of a picture in which Netflix is presented as a Trojan horse offered to children, hiding a "transgender wookiee".

Netflix did not respond to Barron's request for comment.

Netflix shares were falling at the beginning of trading at the same time as the market as a whole: shares were declining due to the US government shutdown. However, the S&P 500 and Nasdaq Composite indices then recovered their losses and moved to growth, while Netflix shares remained in the negative.

With his writings, Musk joined calls for a boycott of the streaming giant circulating on social media, believe Barron 's and Forbes.

Conservative users have begun circulating screenshots of tweets allegedly by Hamish Steele, author of the Netflix animated show Dead End: Paranormal Park, in which he allegedly criticizes British Prime Minister Keir Starmer for condemning the murders of right-wing American political activist Charlie Kirk, Barron's writes.

The publication was unable to verify the authenticity of these screenshots, as Steele ' s X account is closed. Forbes referred to the Libs of TikTok account, which published a screenshot of Steele's alleged message. The same account had previously published excerpts from Steele's animated series Dead End: Paranormal Park, which was shut down in 2023, and claimed that the work "imposes a pro-transgender [agenda] on children," Forbes explained.

Musk reposted the relevant Libs of TikTok post on Sept. 30 with the caption, "This is not OK."

Goldman Sachs this week lowered the target price of Netflix shares to $1300 and reaffirmed its Neutral recommendation (Neutral rating). At the same time, the new target still assumes growth of securities by about 8%.

However, the majority of analysts covering the stock advise buying it (36 out of 54 or nearly 67%). 16 analysts are neutral (no less than a third) and two advise selling them.

If Musk's calls for a boycott lead to a decline in Netflix subscribers, it wouldn't be the first time a well-known company has faced a conservative backlash, Barron's writes.

In 2023, sales of Bud Light beer plummeted after brand owner Anheuser-Busch held a promotion with transgender influencer Dylan Mulvaney. That same year, retailer Target's stock lost about 17% in nine days after it released a collection of merchandise in support of "Pride Month."

This article was AI-translated and verified by a human editor