Netflix Announces 10-for-1 Stock Split to Boost Shares

Bassyonni

ago 9 hours

Netflix Announces 10-for-1 Stock Split to Boost Shares

Streaming service powerhouse Netflix (NFLX) has announced a 10-for-1 stock split, a significant move aimed at making shares more accessible to investors. This change will benefit shareholders who hold shares as of November 10. They will receive nine additional shares for every share they hold. The stock is set to trade on a split-adjusted basis starting November 17.

Stock Market Impact

Following the announcement, Netflix shares saw an increase of over 2% in after-hours trading. Currently priced at $1,125, shares have experienced more than a 40% rise this year. Post-split, the stock’s value would be approximately $112.50 based on the current price, making it one of only ten stocks in the S&P 500 index valued above $1,000.

Reason Behind the Stock Split

Netflix stated that the primary reason for the stock split is to adjust the market price of its common stock. This adjustment aims to make shares more attainable, especially for employees involved in stock option programs.

Previous Stock Splits

2004: First stock split executed.
2015: Second stock split occurred.

Stock splits increase the number of shares held by investors but do not change the overall value of their investment. This makes shares more attractive to new investors due to the lower price point, while the company’s fundamentals remain unchanged.

Financial Performance Overview

Despite the positive market response, Netflix recently faced challenges. The company reported disappointing third-quarter financial results, with earnings per share (EPS) of $5.87, falling short of the expected $6.97. However, revenue reached $11.51 billion, meeting analysts’ consensus expectations.