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Roku Falls on ARK Investment Retreat and Netflix's Slide

Roku and other stay-at-home stocks trade lower after Netflix's subscribers miss.
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Roku  (ROKU) - Get Roku Inc. Report was falling Wednesday after Cathie Wood's ARK Innovation ETF  (ARKK) - Get ARK Innovation ETF Report sold more than 70,000 shares of the streaming platform following Netflix's  (NFLX) - Get Netflix Inc. Report disappointing subscriber results.

Shares of Roku were down 3.56% to $342.20 in premarket trading.

Netflix shares fell after the streaming giant beat Wall Street's first-quarter earnings expectations Tuesday but fell short on subscription growth.

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Netflix only added 3.98 million net paid subscribers in the first quarter vs. its own previous guidance for 6 million additions and consensus estimates for 6.34 million adds. Netflix's guidance for the second quarter was for just 1 million net paid additions vs. analysts' estimates of 4.21 million.

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The company said it anticipates that paid membership growth will reaccelerate in the second half of 2021.

"We believe paid membership growth slowed due to the big COVID-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to COVID-19 production delays," the company said in letter to shareholders.

ARK Innovation ETF, meanwhile, sold 73,767 shares of video streaming platform Roku following Netflix's report.

Netflix and other so-called stay-at home stocks had seen business increase dramatically during the COVID-19 pandemic as consumers and businesses severely reduced traveling and stayed indoors to avoid the potentially deadly disease.

Several of the companies were losing ground Wednesday, including FuboTV  (FUBO) - Get fuboTV Inc. Report, which was down nearly 3%, Peloton Interactive  (PTON) - Get Peloton Interactive Inc. Report, down 1.36%, Zoom Video Communication  (ZM) - Get Zoom Video Communications Inc. Report, down 1.5%, and Cloudflare  (NET) - Get Cloudflare Inc. Class A Report, down 1.23%.

In February, Roku reported a surprise fourth-quarter profit and surpassed 51 million active accounts.