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Siemens Gamesa CEO says announcement demonstrates firm’s “capacity to optimize its portfolio of assets and maximize value.”
The capacity of the onshore wind projects comes to 3.9 gigawatts.
If all goes to plan, the deal between SGRE and SSE is slated for completion by the end of September.

Details of the agreement between SSE and SGRE were announced on the same day the latter released preliminary results for the second quarter, reporting revenue of around 2.2 billion euros and an operating loss of roughly 304 million euros.
Paul Ellis | AFP | Getty Images

Siemens Gamesa Renewable Energy has agreed to sell assets in southern Europe to Scotland-headquartered energy firm SSE for 580 million euros (around $628 million), with around 40 of the turbine maker’s employees moving to SSE as part of the deal.
In a statement released on Tuesday, SGRE said the sale included “a pipeline of onshore wind projects” in Greece, Spain, France and Italy.

The capacity of these projects — which Siemens Gamesa said were “in various stages of development” — comes to 3.9 gigawatts. There is also the potential to develop co-located solar photovoltaic projects with a capacity of up to 1 GW.
Jochen Eickholt, the CEO of Siemens Gamesa, said the announcement demonstrated his company’s “capacity to optimize its portfolio of assets and maximize value.”
SSE Renewables’ Managing Director, Stephen Wheeler, said the project portfolio would “provide a real springboard for our expansion plans in Europe across wind, solar, batteries and hydrogen.”

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Commenting on the sale, Laura Hoy, equity analyst at Hargreaves Lansdown, said: “SSE’s doubling down on its renewables efforts, and today’s announcement of a €580m bet on Southern European wind projects is evidence of management’s conviction.”
“On the surface this looks like the right play — transitioning toward cleaner energy is the clear direction of travel and the group’s seen output improve steadily over the past few months.”

Nevertheless, “having more wind in the sails doesn’t guarantee smoother seas,” she added.
“Performance in SSE’s renewables division has left something to be desired so far this year, and though it seems things are improving, output is still well below targets.”
“Pouring money into a yet unproven part of the business is a risky move to be sure — but at present it seems like the only way forward if growth is eventually on the menu.”

Read more about clean energy from CNBC Pro

Details of the agreement between SSE and SGRE were announced on the same day the latter released preliminary results for the second quarter, reporting revenue of around 2.2 billion euros and an operating loss of roughly 304 million euros.
The company said its performance had been “severely impacted by product and execution related issues,” going on to add that previous guidance for the 2022 financial year was “no longer valid” and “under review.”
It has been a challenging period for Siemens Gamesa. In February, it said it expected revenue for the 2022 fiscal year to shrink by between 9% and 2% year-over-year, having previously earmarked a contraction of between 7% and 2%.
The company also revised its operating profit margin, or EBIT margin before purchase price allocation and integration and restructuring costs, to between -4% and 1%, having earlier forecast growth between 1% and 4%.
On Tuesday, the company said it would “continue to work to achieve revenue within our year-on-year revenue growth range of -9% and -2%, and towards the low end of our previously communicated EBIT pre PPA and I&R costs margin guidance range of -4%, including for both now the positive impact of the Asset Disposal.” The Asset Disposal refers to the newly announced deal with SSE.
Meanwhile, SSE said at the end of March that it expected “full-year 2021/22 adjusted earnings per share to be in a range of between 92 and 97 pence compared to previous guidance of at least 90 pence.”
Siemens Energy, which has a 67% stake in Siemens Gamesa, said on Tuesday that it was also reassessing its guidance for the 2022 fiscal year as a result of SGRE’s announcement.
The company also pointed to other headwinds. “Because of the war against Ukraine and the sanctions imposed on Russia the operating environment for Siemens Energy has become more challenging,” it said, confirming it was “complying with all sanctions and has stopped any new business in Russia.”
Due to the war, Siemens Energy said it had “started to see an impact on revenue and profitability” and was also “experiencing an aggravation of existing supply chain constraints.”
“Due to the dynamic development of the sanctions regime, management is not able to fully assess the potential impact for the remainder of the fiscal year at this point in time and can therefore not rule out further negative effects on revenue and profitability,” it said.
Shares of Siemens Energy were down by around 1.5% on Wednesday at midday London time. Siemens Gamesa’s shares were up by 5.4% after a lower open. If all goes to plan, the deal between SGRE and SSE is slated for completion by the end of September. More

BMW is adding an all-electric model to its flagship 7-Series sedan lineup as the German luxury brand pivots to EVs to better compete against industry leader Tesla.
The new EV, called the i7, was unveiled on Wednesday and is expected to arrive at U.S. dealerships during the fourth quarter.
BMW said the starting sticker price will be $119,300.

BMW 760i xDrive (European model shown)

BMW is adding an all-electric model to its flagship 7-Series sedan lineup as the German luxury brand pivots to EVs to better compete against industry leader Tesla.
The new EV, called the i7, was unveiled on Wednesday and is expected to arrive at U.S. dealerships during the fourth quarter. The i7 will be BMW’s third all-electric vehicle, following the iX crossover and i4 midsize sedan.

Starting prices for the 2023 BMW 7-Series will range from $93,300 for a 740i with a 3.0-liter, twin-turbo six-cylinder engine, to $119,300 for the electric i7 xDrive60. A 760i xDrive model powered by a V-8 engine will start at $113,600. The non-EV versions feature a mild hybrid system to improve performance and fuel economy, according to the company.

BMW 7-Series i7 xDrive60 electric sedan

BMW called the new electric i7 a “fully integrated member of the 7 Series line” — from its luxurious-looking interior with a plethora of screens to its stylish exterior. Preorders for the vehicle opened Wednesday.
The exterior of the new 7-Series lineup marks an evolution of BMW’s design language, which includes sleeker lines and larger grilles. The cars also feature a more muscular design and stance compared to the smoother look of the current models.
The new 7-Series features a 12.3-inch information display behind the steering wheel and a 14.9-inch control display screen. There’s also the “BMW Interaction Bar” across the front instrument panel below the main screens to control climate, ventilation and other functions.

BMW 760i xDrive (European model shown)

The rear interior highlight is the “BMW Theater Screen,” which includes a 31.3-inch 8K touchscreen display with Amazon Fire TV that was previewed by the company earlier this year in a concept vehicle.

The performance of the new 7-Series lineup varies based on the model. The i7’s two electric motors produce a combined output of 536 horsepower and 549 pound-foot of torque. The vehicle is estimated to be capable of traveling 300 miles on a single charge, and accelerate from 0-60 mph in about 4.5 seconds, according to BMW.
Vehicles with the 4.4-liter twin-turbo V-8 engine produce a combined output of 536 horsepower and 553 pound-foot of torque. The V-8 model is expected to achieve 0-60 mph in 4.2 seconds.

BMW 7-Series i7 xDrive60 electric sedan

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Lululemon aims to double its 2021 revenue in the next five years, putting it on track to hit $12.5 billion in sales by 2026, as the retailer rides a wave of Covid pandemic-fueled demand for workout clothes.
The company said three key drivers of its momentum in the coming years will be product innovation, customer experience and market expansion.
Lululemon teased the official debut of a new membership offering in the coming months.

A customer looks at athletic apparel inside a Lululemon store.
Xaume Olleros | Bloomberg | Getty Images

Lululemon aims to double its 2021 revenue in the next five years, putting it on track to hit $12.5 billion in sales by 2026, as the retailer rides a wave of Covid pandemic-fueled demand for workout clothes.
Lululemon on Wednesday announced a handful of longer-term growth targets, including for its men’s business, ahead of a scheduled analyst day event. It cited three key drivers of momentum in the coming years: product innovation, customer experience and market expansion.

The athletic apparel retailer is aiming to double its men’s revenue, double its digital sales and quadruple international revenue, all in the next five years. Lululemon teased the official debut of a new membership offering in the coming months, as well as its foray into Spain and Italy through new brick-and-mortar shops.
“We remain early in our growth journey,” said Lululemon Chief Executive Calvin McDonald, in a statement. “I am excited about taking our growth strategies to the next level.”
The company’s shares rose more than 2% in premarket trading on the news.
The retailer’s sales grew more than 40% in 2021 from the prior year, totaling $6.25 billion, fueled by a strong direct-to-consumer business and overseas momentum for its yoga pants, leggings and sports bras. That’s compared with revenue of $3.98 billion in 2019.
In April 2019, Lululemon had laid out a number of financial targets, including doubling its then-nascent men’s business by 2023. It ended up achieving the men’s goal two years ahead of schedule and also tripled digital revenue from 2018 to 2021.

Citing data from The NPD Group, Lululemon said it gained more market share globally than any brand in the adult active apparel industry from 2019 to 2021. Its rivals include giants such as Nike, Adidas and Under Armour, as well as up-and-coming brands like Vuori for men and Sweaty Betty for women.
A desire among consumers to dress comfortably while spending more time at home has propelled many of these retailers during the Covid pandemic.
Lululemon shares are up about 25% over the past 12 months. The stock closed Tuesday at $404.66.
The company said Wednesday that it projects earnings per share growth to outpace revenue growth in the next five years. It expects to increase the square footage of its stores annually in the low double digits. Its women’s business and North American division are projected to see low, double-digit annual compound growth rates in revenue through 2026.
Lululemon’s chief financial officer, Meghan Frank, called the targets “bold but realistic.”
The company cited recent initiatives including its first-ever footwear collection and a trade-in and resale program that it said should help to achieve these fresh financial targets.
Last month, McDonald told analysts during an earnings call that the initial response to the footwear launch had been “incredible.” So far, Lululemon has only released a limited line of women’s running shoes, with men’s items set to drop next year.
Lululemon is expected to share more around these goals, and answer analysts’ questions, during a meeting set to kick off later Wednesday morning.
Find the full earnings press release from Lululemon here.
This story is developing. Please check back for updates.

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Most Americans struggle to figure out which health insurance plan will save them money. It is a process that can be confusing, time-consuming and costly.
A study of almost 24,000 employees at a major Fortune 100 company found that 61% of them chose the wrong plan for their needs. The average employee could have saved an estimated $372 per year by choosing a different plan, according to the researchers at Carnegie Mellon University who conducted the study.

“The majority of employees chose plans that were more expensive, regardless of how much health care that they actually consumed the following year, and on average, the cost of these choices was about 2% of salary,” Carnegie Mellon associate professor of economics Saurabh Bhargava, who authored the study, told CNBC.
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In 2018, over 8% of Americans’ total household spending went toward health-care costs. This represents about a 37% increase since 2004, up from 5.9% of total household spending.
Forty-six percent of Americans say it’s difficult for them to pay the out-of-pocket costs for medical care not covered by their insurance, according to an October 2021 poll from the Kaiser Family Foundation.
“It seems like people aren’t able to maximize their welfare because they’re having trouble understanding the decision environment,” said Anya Samek, associate professor of economics at the Rady School of Management at the University of California, San Diego.

One major issue in choosing a health-care plan is people don’t understand the lingo insurance companies use to discuss each plan. Only about 1 in 3 people are able to correctly identify three common health insurance terms: premiums, copays and deductibles, according to Policygenius’ 2020 Health Insurance Literacy Survey. This lack of understanding is negatively impacting the pockets of Americans.
Watch the video above to learn why Americans struggle to pick the most financially beneficial insurance plan for them and how to avoid leaving money on the table.
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When high-priced mega mansions for sale languish on the market — sprawling, flashy and unable to attract a buyer — some owners turn to a double-edged option: a real estate auction.
The auction block can move trophy properties with nosebleed-worthy price tags quickly, after years of idling. But it comes with a harsh reality.
An auction can act as a metaphorical real-estate guillotine, slicing inflated asking prices in half or worse, according to a CNBC review of recent sales.

An aerial view of the grounds of Villa Firenze in Beverly Hills, California.
Concierge Auctions

When high-priced mega mansions for sale languish on the market — sprawling, flashy and unable to attract a buyer — some owners turn to a double-edged option: a real estate auction.
The auction block can move trophy properties with nosebleed-worthy price tags quickly, after years of idling. But it comes with a harsh reality.

An auction can act as a metaphorical real-estate guillotine, slicing inflated asking prices in half or worse, according to a CNBC review of recent sales.
The three highest-priced homes ever to sell at auction each came up for sale in the past 14 months. And while each transaction carried an eye-popping final bid, the three mansions saw their original asking prices slashed by 70% on average — leaving a combined $600 million on the table.
It’s an unfortunate fate that could plague a dermatologist-turned-developer and his home’s upcoming date with the auctioneer.

Marc & Tiffany Angeles

Dr. Alex Khadavi, a celebrity skin doctor in Los Angeles, was hoping for a quick sale and big payday when he finally completed a 21,000-square-foot mansion that took seven years and tens of millions of dollars to develop.
But a little over a year since he listed it for sale — with a price tag featuring a string of lucky 7s at $87,777,777 — the doctor’s dreams of cashing out are being crushed by a mountain of debt, unpaid contractor bills, bankruptcy court proceedings and trouble with the law. 

Now he’s running low on luck, money and time. 
Khadavi, who filed for Chapter 11 bankruptcy protection about two weeks after putting the home on the market, hasn’t lost his sense of humor, though.
“The home is sandwiched between billionaires, and I’m the poorest guy on the block,” he told CNBC with a laugh.

Dr Khadavi seated on top of the DJ booth that rises from beneath the floor at his spec house in Bel Air.
Joe Bryant

Khadavi admitted he got in over his head developing the luxury residence, which includes seven bedrooms, 11 baths and over-the-top features such as a glass-encased industrial elevator, a giant car gallery, a stealth DJ booth that rises out of the marble floor powered by subterranean hydraulics, and a high-tech audio-visual system for projecting an NFT collection inside and outside the home.
“It kind of became a passion and obsession, and it cost more money than I thought,” Khadavi said.
Public records show Khadavi paid $16 million in 2013 for the lot at 777 Sarbonne Road, which included an existing home he later demolished. Then came a string of seven-figure financing deals, including a sizable loan in 2020 for $27 million. 
Those nine years also brought a storm of financial trouble around the property including default notices, a government lien, the looming threat of trustee sales, and two mechanic’s liens filed by contractors who claimed they were never paid for their services.
On top of it all, last year Khadavi was arrested after he was allegedly caught on a surveillance camera in the lobby of his apartment building residence using homophobic slurs and threatening to kill his neighbors, who are a married gay couple. Khadavi pleaded not guilty and told CNBC he had no comment on the pending case.

Despite all his legal troubles, Khadavi managed to finish the home but said he never imagined he’d have to carry the cost for more than a year while waiting for a buyer who would never materialize. With few options left, he’s surrendered to the fact that his home’s value will soon be determined at auction. 
“I can’t carry the cost. I had to do what I had to do,” he said.

A view of the driveway leading to the residence at 777 Sarbonne Road in Bel-Air, California.
Joe Bryant / Aaron Kirman Group

Hoping for a quick sale, Khadavi together with the home’s co-listing agents, Aaron Kirman of Compass and Mauricio Umansky of The Agency, decided to auction the house.
“He had a very tight timeline. And he was willing to give up a level of control … and let the market determine the price in a very tight, elevated moment,” Kirman told CNBC.  
The sale will be handled by Concierge Auctions, the leading luxury home auctioneer, and includes a reserve set at $50 million, which means Khadavi won’t entertain offers below that number. The bidding is set to start on April 21, and the auction will unfold over five days — the standard duration for most of the company’s home sales.

A glass-and-marble bridge overlooks the living room and leads to the owner’s wing.
Marc & Tiffany Angeles / Aaron Kirman Group

“It’s a very short timeframe, which could either be good or bad,” said Kirman, who recently partnered with Concierge Auctions on the auction of 944 Airole Way, a mega-mansion that sold for a record $141 million.
Khadavi hopes that big sale will bode well for his upcoming auction. While he believes the view alone from 777 Sarbonne is worth his $87.78 million asking price, he admitted he’d be happy with millions less.
“My magic number is $77 million,” Khadavi told CNBC. (His favorite number is 7.)
“I’d like it to be that, it would be amazing.”

Skyline views from 777 Sarbonne’s infinity-edge pool.
Joe Bryant / Aaron Kirman Group

Laura Brady, founder and CEO of Concierge Auctions, told CNBC the majority of the company’s clients opt for an auction after unsuccessfully trying to sell on their own. But homes that sit on the market for an extended period of time with a sky-high ask aren’t likely to score that price at auction, either, she said.
“Those that have been on the market prior to auction, especially if they’ve been listed for a year or more, have a hard time exceeding their prior list prices at auction, as they’ve already been exposed at those prices,” Brady said.
If Khadavi’s home sells for $50 million or more, the modern mansion will command a spot among the priciest homes ever sold at auction.
Here’s a countdown of the top four most expensive sales ever achieved at auction, the massive price cuts they suffered at the auction block and a closer look at some of the key players in each of the mega-deals.

4. Le Palais Royal aka Playa Vista Isle

Concierge Auctions

This 60,000-square-foot, Versaille-inspired mansion located in Hillsboro, Florida, first hit the market in 2015 with a $159 million record-breaking price tag. At the time it was the highest listing price ever for Broward Country, abutting Palm Beach to the north and Miami-Dade to the south. 
The over-the-top home, called Le Palais Royal, was covered in 22k gold leaf accents inside and out and includes several waterfalls along with a 150,000-gallon, resort-size pool in the oceanfront backyard. 

Gold-trim moldings in the master bedroom
Concierge Auctions

The owner at the time was Robert Pereira II, an executive at Middlesex Corporation, a Massachusetts-based construction company founded by Pereira’s father. From 2015 to 2018, the home was on and off the market and underwent a name change from Le Palais Royal to Playa Vista Isle.

In 2018 Concierge Auctions brought the mansion to the auction block. Public records reveal the highest bid was placed by an LLC with reported ties to Teavana co-founder Andrew Mack. 
The home, plus an undeveloped lot next door, sold for $42.5 million. At the time, the price was the highest ever achieved at auction — yet still $116.5 million short of Pereira’s original asking price, cementing a price cut of about 73%.

3. Villa Firenze

Villa Firenze in Los Angeles’ Beverly Park neighborhood reportedly took seven years to build and includes 20 bedrooms and 24 baths, according to the listing brokerage Hilton & Hyland.
The owner was Hungarian-born billionaire Steven Udvar-Hazy, who made his fortune in the airplane leasing industry and is currently the executive chair of Air Lease Corp.
By early 2021, he’d already been trying to sell the home for years. 

Exterior view of Villa Firenze in Beverly Hills, California
Concierge Auctions

The mansion first hit the market in 2017 for $165 million, which made it one of the most expensive homes for sale in America. But it sat on the market for four years with no takers, and it was unlisted and relisted several times before the price dropped just slightly to $160 million in 2020.
The $5 million discount didn’t convince any buyers to jump, and in early 2021 the residence at 67 Beverly Park Court went to auction with no reserve. Concierge Auctions ran that auction, too. 
Public records show the deal closed in April 2021 for $51 million, including a 12% buyer’s fee and a 1.5% commission split by the brokers on the listing, according to the auction platforms website. 
The home was purchased by the Roy L. Eddleman Trust. Eddleman is the founder and former chair of Spectrum Labs, which was acquired by pharmaceutical company Repligen for $359 million in 2017. 
Eddleman’s winning bid for Villa Firenze represented a $114 million decrease from the billionaire seller’s original asking price — a bargain at 69% off.

2. The Hearst Estate aka The Godfather mansion

Leonard Ross

The Hearst Estate in Beverly Hills is one of the most storied homes to recently go to auction. 
The eight-bedroom, 15-bathroom property was once owned by Randolph Hearst and made even more famous by films such as “The Godfather” and “The Bodyguard” that featured the distinctive salmon-colored mansion.  
Back in 2016, the home was listed for $195 million. Over the years, it came on and off the market and saw its price tag whittled down to $48 million.
In 2019 the LLC that owned the home was served with a notice of default on debt totaling more than $26 million. And in 2021 the estate’s owner, financier and litigator Leonard Ross, saw his home head to a courthouse auction.
Four listing brokers from three brokerage firms represented the listing, including John Gould of Rodeo Realty and Gary Gold with Hilton & Hyland. Both agents were present in the courtroom to witness the billionaire-bidding war that ensued.

According to Gould, five billionaires entered the courtroom and the judge started the bidding at $48 million.
“It was exciting,” he said. The judge looked around the room, fielding bids at $100,000 increments: “48-one, 48-two, 48-three… At about $54-55 million, the first ones started to say, ‘No, too rich for me.'”
With the excitement building, Hilton & Hyland’s Gold said, it starts to feel like the once-unattainable price tag could actually be in reach.
“You’ve got all these people absolutely putting their money up ready to make a purchase, sitting there with other people wanting to do the same thing,” Gold said.
“The difference is with these types of sales is there’s no contingencies, the gavel goes down and you are buying that house,” he said.
The top bid, plus the 12% auction fee, brought the final sale price to $63.1 million and transferred the home to Berggruen Holdings, the investment vehicle of billionaire Nicolas Berggruen’s Charitable Trust. 
Each of the listing agents split a reduced commission on the deal, which was approved by the judge.
In October 2021 when the deal closed, the Hearst Estate edged out both Playa Vista Isle and Villa Firenze to become the most-expensive home to ever sell at auction, but the price was still about $131.9 million lower than the 2016 asking price, a 68% cut.
Neither Gould nor Gold was involved with the home when it first listed on the market, but both men said the disparity between an asking price and an actual sale price, whether at auction or in a traditional sale, often says more about a seller’s unrealistic expectations than it does about market conditions.
“Anyone could ask anything they want for a property, as far as I’m concerned,” Gold said. “When they were originally asking $195 [million]… That was just some sellers, you know, pipe dream.” 
Rodeo Realty’s Gould said he sees a lot of “ego-pricing,” where an owner asks a broker to list the home with a giant price tag, based more on the homeowner’s pride than on market-based valuation.
In reality, he said, the homes “may not be worth anything near that.” 

1. ‘The One’

The megamansion is sometimes referred to as “the space station” because of its massive size and unusual shape.
Marc Angeles

The infamous mega-mansion called The One sits high atop Bel Air and spans 100,000-plus square feet with 21 bedrooms, 42 baths, a 30-car garage, 60-foot indoor pool and massive nightclub.
The behemoth was originally publicized by developer Nile Niami with a $500 million price tag. 

Developer Nile Niami (left) walks with CNBC’s Robert Frank (right) during a 2017 interview at “The One” while the megahome was under construction.

It took 10 years to build the residence located at 944 Airole Way, and along the way the developer racked up a mountain of debt topping $120 million, according to court filings.
The mega-mansion wasn’t even completed before it landed in bankruptcy court proceedings and headed to the auction block with no certificate of occupancy and a new asking price of $295 million.

The auction, also handled by Concierge Auctions, didn’t carry a reserve that would prop up a low-end threshold for bids. But in this case, the winning bid would require the final approval of a bankruptcy court judge, an unusual scenario. Only 5% of Concierge Auction’s sales involve distressed properties, according to CEO Brady.
The One mega-mansion brought in a top bid of $126 million delivered by Richard Saghian, the CEO of fast-fashion retailer Fashion Nova. Saghian paid the auctioneer’s standard buyer’s premium of 12%, or about $15 million, bringing the total sale price to $141 million — far and away the most paid for a single-family home at auction.

The formal dining room includes seating for 20 and an over-sized glass wine cellar for displaying large-format bottles.
Marc Angeles

Weeks after a bankruptcy court judge approved the sale, Saghian seemed more than content with the deal. 
“As a lifelong Angeleno and avid collector of real estate, I recognized this as a rare opportunity that also lets me own a unique property that is destined to be a part of Los Angeles history,” Saghian told CNBC through a spokesperson.
He paid just $1,342 per square foot in a neighborhood where high-end homes can command three to four times that number. But experts say Saghian will likely need to spend many millions more to actually finish the home and obtain a certificate of occupancy. 

The mansion’s foyer includes 25-foot ceilings, a large serpent-like sculpture and panoramic views of downtown LA.
Joe Bryant

“We did everything that was humanly possible to get the highest number,” said Compass agent Kirman, who served as a court-approved listing agent, along with Williams & Williams.
Kirman was openly disappointed with the auction outcome. 
The broker, who split a judge-approved 1% commission on the transaction, told CNBC he hoped the sale would top $177 million, a record price set in October for a much smaller mansion in Malibu.
“I wanted to break a record. I mean, I wanted to hit, you know, $200 [million] or more,” Kirman said. “We were disappointed in it… but the market spoke.”

The megahome’s view of Los Angeles at dusk.
Marc Angeles

Even after the auction fees, the fast-fashion mogul managed to hack $359 million, or almost 72%, off the original price tag of 10 years prior.
“It’s ludicrous,” said Kirman of the nine-figure disparity. “If you look at the high end of luxury real estate, more often than not, when you’re talking about a mega-mansion, they have sold for pretty much half the price.”
Correction: A mega-mansion at 777 Sarbonne Road will go up for auction starting on April 21, 2022. An earlier version of this story misstated the date. An earlier version misspelled the name of the Roy L. Eddleman Trust.

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Netflix said more than 100 million global households use a shared password, with more than 30 million of those in the U.S. and Canada.
Netflix suggested it will begin to make accounts that share passwords pay up.
Netflix has long ignored password sharing because it has been growing without cracking down on it, but the company announced it lost subscribers in the first quarter for the first time in more than a decade.

Reed Hastings, CEO of Netflix, attends a press conference in Mexico City, Mexico.
Hector Vivas | Getty Images

Today could be a dark day for your ex-boyfriend’s brother.
Netflix, the world’s largest streaming video company, warned a global crackdown on password sharing is coming. It seems like a serious warning this time, and it could mean an end to the rampant practice of borrowing a family member’s or friend’s — or loose acquaintance’s — login information.

Netflix said it estimates more than 30 million U.S. and Canadian households are using a shared password to access its content. The company said more than 100 million additional households were likely using a shared password worldwide.
In its quarterly shareholder letter, Netflix acknowledged it has purposefully allowed generous out-of-home password sharing because it helped get users hooked on the service. But with competition from Disney, Warner Bros. Discovery, Paramount Global, NBCUniversal, Apple TV+ and other streamers eating into its growth, Netflix said it wants the millions of households sharing passwords to start paying.
“Our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds,” Netflix said in its letter. “Account sharing as a percentage of our paying membership hasn’t changed much over the years, but, coupled with the first factor, means it’s harder to grow membership in many markets — an issue that was obscured by our COVID growth.”

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Netflix reported a loss of 200,000 paid subscribers in the first quarter ended March 31 — the first time in more than 10 years Netflix has lost subscribers during a quarter. The company projected it will lose 2 million more subscribers in the second quarter.
The streaming platform currently has 222 million subscribers worldwide. It enjoyed booming growth during the pandemic, but that customer surge has subsided — and now turned negative — as Covid-19 quarantines have largely lifted.

Planning the crackdown

Netflix has lived with password sharing because the company was, in the words of co-founder and co-CEO Reed Hastings, “doing fine” without taking any strong actions.
“In terms of [password sharing], no plans on making any changes there,” Hastings said in 2016. “Password sharing is something you have to learn to live with, because there’s so much legitimate password sharing, like you sharing with your spouse, with your kids …. so there’s no bright line, and we’re doing fine as is.”
Netflix has built a consumer friendly brand over the years, and allowing password sharing has helped with that image.
“Sharing likely helped fuel our growth by getting more people using and enjoying Netflix,” the company said in its shareholder note. “And we’ve always tried to make sharing within a member’s household easy, with features like profiles and multiple streams.”
But times have changed. And when the growth stops, attitudes tend to change.
Earlier this year, Netflix began testing different ways to curb password sharing in Chile, Costa Rica and Peru. Executives said on the company’s earnings call Tuesday that it could expand the model it laid out in those countries, charging extra to accounts that share passwords out of home.
Netflix didn’t outline a concrete global strategy yet but suggested global changes could come as early as 2023.
WATCH: Netflix earnings are a warning to streaming services

Disclosure: Comcast is the parent company of CNBC and NBCUniversal.

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Shares of Netflix cratered more than 25% on Tuesday after the company reported a loss of 200,000 subscribers during the first quarter.
It’s the first time the streamer has reported a subscriber loss in more than a decade.
Netflix blamed increased competition, password sharing as well as inflation and the ongoing Russian invasion of Ukraine for the stagnant subscriber growth.

Netflix on Tuesday reported a loss of 200,000 subscribers during the first quarter — its first decline in paid users in more than a decade — and warned of deepening trouble ahead.
The company’s shares cratered more than 25% in extended hours after the report on more than a full day’s worth of trading volume. Fellow streaming stocks Roku, Spotify and Disney also tumbled in the after-hours market after Netflix’s brutal update.

Netflix is forecasting a global paid subscriber loss of 2 million for the second quarter. The last time Netflix lost subscribers was October 2011.
“Our revenue growth has slowed considerably,” the company wrote in a letter to shareholders Tuesday. “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds.”
Netflix previously told shareholders it expected to add 2.5 million net subscribers during the first quarter. Analysts had predicted that number would be closer to 2.7 million. During the same period a year ago, Netflix added 3.98 million paid users.
Co-CEO Reed Hastings said the company is exploring lower-priced, ad-supported tiers in a bid to bring in new subscribers after years of resisting advertisements on the platform.
Here are the key numbers from the first-quarter report:

EPS: $3.53 vs, $2.89, according to a Refinitiv survey of analysts.
Revenue: $7.87 billion vs. $7.93 billion, according to a Refinitiv survey of analysts.
Global paid net subscriber additions: A loss of 200,000 compared with 2.73 million adds expected, according to StreetAccount estimates.

The company said that the suspension of its service in Russia and the winding-down of all Russian paid memberships resulted in a loss of 700,000 subscribers. Excluding that impact, the company said it would have seen 500,000 net additions during the most recent quarter.
Netflix also cited growing competition from recent streaming launches by traditional entertainment companies, as well as rampant password sharing for the recent stall in paid subscriptions.
The company estimates that in addition to its 222 million paying households, access is being shared with more than 100 million additional households through account sharing. It warned a global crackdown could be coming.

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Netflix was an earlier winner when Covid lockdowns sent families inside and searching for entertainment. But the company now says pandemic-era gains “clouded the picture” for the company and that it’s seeing a downturn as people return to more normalized out-of-home activities.
In an effort to continue to gain share in the market, Netflix has increased its content spend, particularly on originals. To pay for it, it’s hiked prices of its service. The company said Tuesday those price changes are helping to bolster revenue, but were partially responsible for a loss of 600,000 subscribers in the U.S. and Canada during the most recent quarter.
While the company is exploring other options for growth, such as adding video games, analysts and investors are wondering what else Netflix can do to bolster profits.
The company’s revenue increased nearly 10% to $7.87 billion, but fell short of analysts’ expectations of $7.93 billion.
Net income during the quarter ended March 31 fell 6.4% to $1.6 billion, down from $1.7 billion the year prior. Excluding items, the company earned $3.53 per share, well above the $2.89 per share analysts had expected, according to a Refinitiv survey.
The company’s free cash flow amounted to $802 million during the quarter, up from $692 million a year earlier.
Correction: Netflix reported revenue of $7.87 billion for the first quarter of 2022. An earlier version misstated this.

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Stocks of other streaming video companies fell in extended trading on Tuesday after Netflix revealed it had lost subscribers during the first quarter, its first decline in more than a decade.
Netflix warned that it could start to crack down on password sharing, which could increase its number of paid subscribers.
As the economy reopens in the U.S. and people spend more time out of their houses, it’s almost as if the pandemic never happened — at least in terms of the relative weakness of Netflix stock.

The stock prices of streaming video companies fell in extended trading on Tuesday after Netflix released earnings that showed the sector leader lost subscribers for the first time in more than a decade.
Shares of Disney dropped as much as 5%, while Roku fell 6% after-hours after rising nearly 8% during regular trading. Warner Bros. Discovery, the owner of HBO Max, was off about 4%, and Paramount (formerly ViacomCBS) declined nearly 6%.

The news highlighted investor fears over a broader slowdown of consumer spending.
Netflix fell more than 25% in extended trading on Tuesday after reporting a loss of 200,000 subscribers in its recent quarter and projecting a loss of 2 million subscribers in the second quarter.

Reed Hastings, Co-CEO, Netflix speaks at the 2021 Milken Institute Global Conference in Beverly Hills, California, U.S. October 18, 2021.
David Swanson | Reuters

The video streamer also warned on Tuesday that it could start to crack down on password sharing, which could increase its number of paid subscribers. Netflix has allowed its 222 million users to share their account information with friends and family during its heady growth, but now it wants all users to pay. It estimated that as many as 100 million people were streaming Netflix with someone else’s password.
Netflix and other streaming companies were significantly boosted by the pandemic as consumers spent more time and money streaming content from home.
But as the economy reopens in the U.S. and people spend more time out of their houses, it’s almost as if the pandemic never happened — at least in terms of the relative weakness of Netflix stock.

On Tuesday, shares hit their lowest level since November 2019. The stock is now down more than 40% for the year, and more than 60% from its peak in November 2021.

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