Netflix has announced a 10 for 1 stock split, scheduled to take effect on November 17. This move will reduce the price per share to approximately one-tenth of its current value, making the stock more accessible to employees and retail investors. Shareholders will receive 10 shares for every one share they currently own. With Netflix stock closing at $1,089 on Thursday, the post-split price would be around $110 per share. The total value of each investor’s holdings remains unchanged, as the split increases the number of shares while proportionally reducing the price.
The company stated that the decision was made to reset the market price of its common stock to a range that would be more accessible to employees participating in its stock option program. Stock splits are commonly used to improve liquidity and broaden ownership among smaller investors.
Following the announcement, Netflix shares rose as much as 3 percent in pre-market trading. This marks the third stock split in the company’s history, with previous splits occurring in 2004 (2 for 1) and 2015 (7 for 1). Academic research suggests that stock splits may signal management’s confidence in future performance. While splits do not affect a company’s market capitalization, they can lead to increased investor interest and short-term price appreciation.
Since going public in 2002, Netflix has delivered extraordinary returns, with its stock appreciating more than 100,000 percent. The company’s transformation from a DVD rental service to a global streaming leader has made it one of the most successful growth stories in the tech and entertainment sectors.