Key Points
- Netflix has approved a 10-for-1 stock split after its per-share price maintained its $1,000+ price point for several weeks.
- The split is intended to help retail investors and Netflix’s own employees buy shares of the company.
- The last time Netflix executed a similar stock split was July 2015.
Netflix wants to make it easier for the everyday investor — and some of its own employees — to own a part of the company.
The streaming giant on Thursday said it is proceeding with a 10-for-1 stock split, with the goal of helping retail investors and employees buy shares in the company. The move comes after Netflix’s stock price crossed $1,000 per share earlier this year.
Shareholders of record as of November 10 will receive nine additional shares for each one they own, with that transaction finalized on November 14. The company’s stock will begin trading at the split-adjusted price on November 17, executives affirmed in a press release on Thursday.
Netflix said the action is intended to “reset the market price of the Company’s common stock to a range that will be more accessible to employees who participate in the Company’s stock option program.”
Netflix’s stock price closed at $1,089 per share, down 9 percent compared to last month but up more than 22 percent since the start of the year.
Netflix is one of just 10 companies in the S&P 500 with shares trading above $1,000. Other high-priced stocks have historically taken similar steps to increase affordability, though analysts note that the practical effect of such splits has diminished in recent years as most retail brokerages now allow fractional share trading.
Stock Price
The last time Netflix took similar action was July 2015, when its board approved a 7-for-1 stock split. Then, shares of Netflix were priced above $600, an amount that holds $822 worth of buying power in today’s money when adjusted for inflation.
The announcement comes about one week after Netflix reported its third quarter (Q3) financial earnings, which saw revenue of $11.51 billion during the three-month period that ended in late September.
Net income clocked in at $2.55 billion, up 8 percent compared to last year, as the company continued to build out its digital advertising business and prioritized a password-sharing crackdown in favor of pushing cost-conscious streamers toward its cheaper, ad-supported plans.
