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Netflix announced a 10-for-1 stock split on Thursday, which doesn’t fundamentally change anything about the company, but could make expensive individual stocks more accessible to retail investors.
Existing shareholders as of November 10 will receive an additional nine shares for each share they own. The company acquired the allotment on November 14th, and the shares will begin trading at the new post-split price on Monday, November 17th.
Netflix, the streaming giant whose stock has soared to over $1,000 over the past three years, said it is making changes to “reset the market price of our common stock to a range that is more accessible to employees who participate in our stock option program.”
Netflix shares rose more than 2% after hours following the split announcement. The company’s stock closed Thursday at $1,089 per share, up 42% over the past year.
Netflix, 5 years
The stock is now one of 10 stocks on the S&P 500 with a stock price above $1,000.
It is common for companies to split their shares when they reach such levels, but their effectiveness is debatable due to the widespread use of fractional trading available on securities platforms.
A split simply gives each holder more shares at a lower price, without changing the value of their holdings at all. All of the company’s basic policies remain unchanged.
Warren Buffett famously refused to split his stock. Berkshire Hathaway As a result, the stock price is more than $717,000 per share. Mr. Buffett actually created a “B” class of stock at a more modest price of $478 per share.
Netflix has split its stock twice, in 2015 and 2004.
Description: This article has been updated to clarify that Netflix stock has increased 42% over the past year.
