Media companies that tanked on Monday in the wider #BlackMonday stock market freefall rebounded on Tuesday.
Netflix was up 7 percent; Apple improved 5 percent; Facebook climbed 4 percent; Twitter inched up 3 percent; Time Warner, Disney, Viacom and CBS were all up 2 percent; and 21st Century Fox grew 1 percent.
On Netflix, which was down as much as 16 percent on Monday, senior market analyst at City Index Ken Odeluga suggested the temporary freakout was unwarranted.
“It takes quite convoluted logic to read the situation in China into NFLX’s current business profile, and that also applies to other large Internet-based and cable broadcasters,” he told TheWrap. He also added the streaming giant’s success is based mostly on domestic revenue.
“Don’t forget NFLX revenues are still 76 percent/24 percent domestic vs. international … of that, zero is from China, and that is unlikely to change for several years.”
The volatility of a number of media stocks has been exposed throughout August after Disney lowered its profit forecast over the effect of cord cutting on ESPN subscribers.
“NFLX shares, like the vast majority of US equity assets, are being sold off indiscriminately, and when the market calms down, this stock will be among those in which investors will find value, as they did, on a relative basis, before the current washout started,” Odeluga concluded.