ETFs Most Exposed To Netflix After Earnings Rout

The streaming giant reported losing subscribers for the first time in a decade.

Netflix suffered its second consecutive post-earnings rout Tuesday afternoon, with its stock dropping as much as 25% and evaporating almost $39 billion in market value. 

The streaming service lost a fifth of its value in January after estimating it would add only 2.5 million new customers by the end of the first quarter, shaking investor confidence that it can keep growing. Those fears manifested on Tuesday when the company reported it had lost a net 200,000 subscribers, including approximately 700,000 in Russia after it canceled service in the country. 

It was the first loss in subscribers for the company since the second quarter of 2011. Netflix’s guidance also suggested it will lose 2 million subscribers in the current quarter. 

Fellow streaming heavyweights Roku and Disney lost as much as 6.6% and 5%, respectively, in post-session trading as concerns about competition mounted. 

ETFs With Heavy Netflix Exposure 

A total of 245 ETFs hold Netflix stock, according to ETF.com data provider FactSet. 

The Vanguard Total Stock Market ETF (VTI) has the largest cut of Netflix shares among all U.S. ETFs, holding 2.89% of its shares outstanding. The three largest S&P 500 ETFs control 4.12% of the company: the Vanguard S&P 500 ETF (VOO), the iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF Trust (SPY). The Invesco QQQ Trust (QQQ) holds 1.43% of outstanding stock. 

However, those funds are heavily diversified due to their size. Netflix amounts to approximately 0.4% of the S&P 500 funds each, 1.18% of QQQ and 0.36% of VTI. 

On a weight basis, the Invesco Dynamic Media ETF (PBS) has the largest allocation to Netflix, with a 4.92% weight. The Communications Services Select Sector SPDR Fund (XLC) has the second-largest allocation, at 4.46%; while Simplify Volt Pop Culture Disruption ETF (VPOP) and the Vanguard Communication Services ETF (VOX) both give 4.45% of their weights to Netflix. 

Contact Dan Mika at [email protected], and follow him on Twitter