Remember when Netflix stock was cruising above $1,000 per share and you’d look at it like “Yeah, maybe when I win the lottery”? Well, good news: Netflix just announced they’re doing some financial magic to make their stock way more accessible.
The TL;DR: Netflix is doing a 10-for-1 stock split. Translation? If you owned one share at $1,000, you’ll soon own 10 shares at $100 each. Same value, just chopped up into bite-sized pieces.
Think of it like getting a $100 bill broken into ten $10s. You still have the same amount of money, but now you can actually use it at the vending machine.
Why Netflix Is Playing Stock Split Jenga
Netflix has been on an absolute tear since their last stock split back in 2015. We’re talking about a 26% average annual return over the past decade – which is basically the financial equivalent of hitting home runs while blindfolded.
But here’s the thing: when your stock price gets into four-digit territory, it starts feeling exclusive in all the wrong ways. Netflix officially said they’re doing this to make shares “more accessible to employees who participate in the company’s stock option program.” Translation: even their own employees were getting priced out.
The split happens November 17th, so if you own Netflix shares by November 10th, you’ll wake up on November 15th with nine extra shares for every one you had. It’s like Christmas morning, except instead of presents under the tree, you get more pieces of paper that represent the same value.
The Psychology of Cheaper-Looking Numbers
Here’s where it gets interesting: stock splits don’t actually change the fundamental value of a company. Netflix isn’t suddenly worth more because they did some arithmetic. But here’s the weird part – splits often boost stock prices anyway.
Why? Because humans are beautifully irrational. A $100 stock “feels” more affordable than a $1,000 stock, even though you can buy fractional shares these days. It’s the same reason stores price things at $9.99 instead of $10.
Netflix shares jumped about 3% on Friday after the announcement, which suggests investors are already getting excited about the “cheaper” entry point.
Who’s Next in the Split Club?
Netflix joins the recent stock split party that included Nvidia (also 10-for-1), Broadcom (10-for-1), and Chipotle, who went absolutely wild with a 50-for-1 split. Because apparently, even burrito companies can have expensive stock problems.
Looking ahead, keep an eye on Booking.com (trading over $5,000 per share – yikes), AutoZone ($3,600+), and BlackRock ($1,100+). These companies are basically the “we need a stock split” starter pack.
The bottom line? Netflix just made it easier for regular humans to own a piece of the streaming empire without needing to sell a kidney. Whether that translates to actual gains is anyone’s guess, but at least now you can afford to find out.