Why Cramer Sees Selling Netflix As A Bad Idea Despite Underwhelming Q1 Report

Jim Cramer came to the rescue of Netflix Inc NFLX and urged investors to give the company the “benefit of the doubt” after disappointing first-quarter subscriber growth, CNBC reported Wednesday.

What Happened: The “Mad Money” host cited that the subscriber video on demand company’s past performance over the years as the reason for giving it a break. 

“After the incredible performance this company’s given us over the years, you’ve gotta remember that doubting Netflix has been a mistake every step of the way,” Cramer said, according to CNBC.

See Also: How To Buy Netflix Stock

Pointing to Netflix CFO Spencer Neumann and his comments at the company’s earnings conference where he said “business remains healthy,” Cramer said, “To me, that says ‘please, don’t panic.’”

“I think they’ll find a way to jumpstart new sign-ups with must-see content, whether they create it themselves or have to license it from someone else,” said the former hedge fund manager.

Netflix shares closed 7.4% lower at $508.90 on Wednesday.

Why It Matters: Netflix reported 208 million paid subscribers at the end of the first quarter, which is lower than the 210 million figure it gave in its guidance and a rise of 14% year over year.

In Q1, the company added 4 million paid subscribers, a sharp decline from the 16 million additions in the same period a year earlier. 

The SVOD firm is attributing the dip to a “lighter content slate,” which it is planning to combat by infusing cash into content and tailoring its offerings to local tastes around the world. 

Cramer said earlier on Wednesday that Netflix stock could fall to $490 levels but he is bullish in the long run, according to CNBC. 

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