Netflix Co-Founder Hastings Steps Down... Shares Fall 9%
Reed Hastings, Co-founder of Netflix, announced on April 16 (local time) that he will retire after his term as chairman of the board expires in June.
Hastings, who began his career as a software engineer, co-founded Netflix with Marc Randolph in 1997. He served as CEO from 1999 to 2023, transforming Netflix into a leader in the streaming market. In 2020, he appointed Ted Sarandos as co-CEO and began reducing his involvement in company management. In 2023, he stepped down as CEO but remained as chairman of the board. Currently, the company is led by co-CEOs Ted Sarandos and Greg Peters.
In a letter to shareholders, Hastings expressed his gratitude for Greg and Ted's dedication to Netflix's excellence, adding, "Because of them, I can now focus on new pursuits." The company stated that Hastings wishes to concentrate on philanthropic activities and other personal endeavors following his retirement.
On the same day, Netflix announced both Hastings's retirement and its first-quarter results. First-quarter revenue rose 16.2% year-on-year to $12.25 billion (approximately KRW 18.119 trillion), and operating profit increased by 18.2% to $3.957 billion. Thanks to a $2.8 billion break-up fee received after the termination of the Warner Bros. Discovery merger agreement, net profit reached $5.283 billion, while earnings per share came in at $1.23, significantly surpassing Wall Street's expectation of $0.76.
During the first-quarter earnings conference call, CEO Sarandos clarified that Hastings's resignation was unrelated to Netflix’s attempt to acquire Warner Bros. Discovery. He emphasized that there was no power struggle, stating, "Reed strongly supported that deal. He actively promoted it on the board, and the board unanimously supported the transaction."
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However, despite the strong first-quarter results, news of Hastings's retirement and weak outlook for the second quarter led to more than a 9% drop in Netflix shares in after-hours trading.
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