Donald Trump took to social media to attack Netflix co-founder Reed Hastings hours after the streaming giant announced his departure from its board, as the company simultaneously reported a disappointing quarterly outlook that sent its shares sliding nearly 9 per cent.
Trump Calls Reed Hastings a ‘SLEAZEBAG’ on Truth Social
wasted little time responding to news of Reed Hastings’ exit from the Netflix board. Writing on Truth Social on Saturday, the US president posted: “Was Reed Hastings forced to leave the Netflix Board because he’s a SLEAZEBAG? What was his Crime, and how many did he commit?”
Trump offered no evidence to support the characterisation and provided no further context for the attack. The post arrived a day after Netflix formally announced that Reed Hastings, 65, was stepping down after 29 years at the company he co-founded, citing a desire to pursue philanthropy and personal interests.
Reed Hastings Steps Down After 29 Years: End of an Era for Netflix
Hastings’ departure closes a defining chapter in the history of streaming entertainment. He provided the seed capital to launch Netflix as a DVD-by-mail service and replaced co-founder Marc Randolph as chief executive in 1999. Over the decades that followed, he steered the company through its existential battle with Blockbuster Video and spearheaded its transformation into a global streaming platform operating across more than 190 territories.
Under his stewardship, Netflix grew into the most valuable entertainment company in the world, outmanoeuvring Hollywood studios at virtually every turn. He stepped back from the chief executive role in January 2023, handing the position jointly to Ted Sarandos and Greg Peters.
In a letter to shareholders, Hastings reflected on his legacy with characteristic understatement. “My real contribution at Netflix wasn’t a single decision; it was a focus on member joy, building a culture that others could inherit and improve, and building a company that could be both beloved by members and wildly successful for generations to come,” he wrote.
Sarandos, speaking on an investor call, sought to put to rest any suggestion that Hastings’ exit was linked to the company’s recent failed attempt to acquire Warner Bros. Discovery. “Sorry if anyone was looking for some palace intrigue here,” he said. “Reed was a big champion for that deal. He championed it with the board. The board unanimously supported the deal.”
Netflix Shares Fall 9% as Second-Quarter Forecast Disappoints Wall Street
The Hastings news landed alongside a set of quarterly results that left investors underwhelmed. Netflix shares fell approximately 9 per cent in extended trading after the company issued a second-quarter forecast that fell short of analyst expectations, marking the steepest single-session decline in four years.
For the current quarter, Netflix projected earnings per share of 78 cents, below the 84 cents Wall Street had anticipated. Revenue guidance for the three months ending in June came in at $12.57 billion, also trailing the $12.64 billion consensus estimate compiled by Bloomberg.
Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management, captured the mood on Wall Street succinctly. “These are great numbers. What people wanted was even better,” he told Bloomberg TV. “They didn’t up their guidance for the year, which I think people were hoping for.”
First-quarter results were, by contrast, solid. Revenue climbed 16 per cent year-on-year to $12.3 billion, ahead of the $12.2 billion estimate. Earnings per share reached $1.23 against forecasts of 76 cents, boosted in part by a $2.8 billion breakup fee paid to Netflix by Paramount after the Warner Bros. deal collapsed.
Netflix Walks Away From Warner Bros. With $2.8 Billion Breakup Fee
bidding process in February had rattled investor confidence at the time, with some on Wall Street interpreting the move as a signal that the company had exhausted its strategic ambitions. Paramount ultimately agreed to acquire Warner Bros. for $110 billion, a deal now facing regulatory scrutiny in both the US and Europe and stiff opposition from Hollywood.
Sarandos pushed back against the narrative that Netflix blinked. In the shareholder letter, he and Peters wrote that Warner Bros. “would have been a nice accelerant for our strategy, but only at the right price.” On the investor call, Sarandos added that the experience taught the company “so much about deal execution,” whilst affirming that mergers and acquisitions remain “a tool to help achieve our goals. As you can see with the Warner Bros. deal, we’ll remain very disciplined as to how we approach it.”
What Comes Next for Netflix: Sports, Mobile and Subscriber Engagement
With the Warner Bros. chapter closed, Netflix is turning its attention to growth on multiple fronts. Sarandos outlined three priorities for the period ahead: stronger programming, new technology and increased revenue per member. The company raised its standard ad-free subscription price by $2 to $20 a month in March.
On the content side, Netflix plans to ramp up sports programming globally. Sarandos cited the World Baseball Classic as a case study, noting that it drove record subscriber gains in Japan. He also confirmed that the company is in discussions about deepening its relationship with the National Football League.
A revamped mobile experience, featuring a vertical video discovery feed, is set to launch later this month. and podcasts as it seeks to grow the time users spend within its ecosystem, a metric that has remained broadly flat over the past two years.
The co-chief executives reported a decline in their own pay last year. Sarandos earned $53.9 million and Peters $53.2 million.