Netflix Stock Plunges 10% as Ad Tiers Slash Engagement, Boost Content Costs

Netflix shares tumbled about 10% after hours following Q1 results, as investors fixated on ad-tier shifts slashing user engagement 25% from peaks and content spending jumping from $17B to $20B, despite a $2.8B merger fee inflating earnings. Pre-market trading earlier reflected a -9.69% drop amid weak forward guidance of 13% growth against a stretched 34x P/E, compounded by Reed Hastings' chairman exit. Analysts now rate the stock a Hold, signaling rising execution risks and profitability pressures in the shift from growth darling to fundamentals scrutiny.