![]() As executives followed Wang onto the stage to outline ways they could reverse the slide, many employees started to grasp that Netflix was in trouble. Netflix’s growth had sputtered in recent months, putting the company on pace to lose subscribers for the first time since 2011. But as soon as he ceded the stage to Spencer Wang, the vice president for finance, investor relations, and corporate development, the mood in the room began to darken, according to two people who were present but aren’t authorized to talk about it. A couple of years into the streaming wars, it looked as if Netflix had not only survived but emerged stronger.Ĭo-Chief Executive Officer Ted Sarandos, who turned Netflix into an award-winning powerhouse, took the stage to open the company’s annual business review meeting after a brief sizzle reel recapping its many hits. Netflix had also broken through at Hollywood’s biggest awards shows, winning two of the top three Emmys and receiving 27 Oscar nominations, the most of any company. It added 36.6 million customers in 2020, a record, and its aggressive investment in original content paid off in 2021 with the French crime show Lupin and the South Korean thriller Squid Game, two of its most popular programs ever. The company had thrived during the pandemic. employees gathered on the second floor of the Anaheim Hilton Hotel expecting to hear good news. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.Around noon on Wednesday, March 16, hundreds of Netflix Inc. ![]() When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. You might see Netflix jumping through these paperwork hoops again if share prices climb past $500, $600, and $700 - but that's unlikely to happen in 2017. Moreover, Netflix shares may have raced higher in recent months, but share prices are still a long way from the wallet-bursting levels seen before the last split. Index-skewing share prices should not be an issue here. That's why Apple (NASDAQ: AAPL) had to go through the motions with a 7-for-1 split of its own before joining the Dow in 2015.Īnd even if Netflix had an eye on Dow membership, several existing Dow components already sport similar or even larger share prices than Netflix these days. And price-based market indexes like the Dow Jones Industrial Average can have their center of pricing balance disturbed if a new high-priced stock joins the party. It's true that some cash-constrained investors might not be able to invest in Netflix if none of the previous splits had happened, pushing Netflix prices to thousands of dollars per share. So why should Netflix stay its hand from executing another stock split in 2017?įirst, these splits really don't do much for shareholders. It's mathematical gymnastics with little real-world value or utility. These moves do not add value to your existing Netflix shares, nor do they take it away. Same amount of pie nobody wins and nobody loses. It's like slicing your pie into 42 pieces instead of 6, but also serving up 7 smaller slices to replace each of the bigger original pastries. So Netflix took the same share-based ownership contract and just divided it up a different way. Apart from rounding errors, that's the same figure as before. ![]() Divide that by seven and you get 61.97 million. At that point, Netflix also started reporting its older share counts as if the stock split had just always been there, so the second-quarter report showed 433.8 million shares for the first quarter of 2015. In the next report, the share count had soared to 436 million. Netflix had issued 62 million shares of common stock as of the end of the first quarter of 2015. Low-single-digit price moves happen all the time to relatively volatile stocks like Netflix. Share prices changed in tandem with the number of valid shares, resulting in a net difference of approximately zero. Netflix does have a history of splitting its stock - twice, over the span of 15 years on the market.
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