Netflix Unveils Ten-for-One Stock Split, Shares Surge

Netflix has announced a significant ten-for-one stock split, aimed at making its shares more affordable for retail investors. This move comes as the company looks to enhance accessibility for employees enrolled in its stock option program. The split is scheduled to take effect after the market closes on November 10, with trading expected to commence on a split-adjusted basis starting November 17.

Details of the Stock Split

The streaming giant will issue nine additional shares for each existing share held. This decision marks Netflix’s third stock split since its public debut in 2002. The previous split took place in 2019 when the share price was reduced from approximately $700 to $100.

Market Impact

As of Thursday, Netflix’s market capitalization stood at $461.44 billion. Following the announcement, shares increased by nearly 3%, reaching $1,123.49 in extended trading. Over the past three years, the company’s stock has surged over 360%, outpacing competitors like Walt Disney and Comcast.

Expert Insights

Analyst Ross Benes from eMarketer noted that while the split will facilitate investment for smaller stakeholders, it does not fundamentally alter the company’s appeal to institutional investors. Netflix’s current forward price-to-earnings (P/E) ratio is 45.96, which significantly exceeds that of its competitors: Walt Disney at 17.54 and Comcast at 6.89.

Conclusion

Netflix’s strategic stock split aims to broaden participation among investors and employees. This action reflects the company’s ongoing commitment to enhancing shareholder value while maintaining strong market performance.