Prediction: The Most-Anticipated Stock Split of the Fourth Quarter Will Be Announced This Month

Core Viewpoint - Netflix's share price has surpassed $1,000, raising speculation about a potential stock split, which could attract investor interest and media attention [1][5]. Group 1: Stock Splits and Market Performance - Stock splits are often seen as milestones in a company's growth, indicating management's confidence in the business [2]. - Historical data from Bank of America shows that stocks that underwent splits rose by 25.4%, significantly outperforming the S&P 500's 11.9% return [3]. - Companies typically choose to split their stocks during periods of confidence and are more likely to do so in bull markets [4]. Group 2: Netflix's Performance and Potential Split - Netflix has experienced a 400% gain over the last three years, driven by successful initiatives such as advertising and paid sharing [8]. - The company's shares are currently around $1,200, positioning it among the highest share prices in the S&P 500, with a potential announcement of a split coinciding with its upcoming earnings report on October 21 [7]. - Netflix previously executed stock splits in 2004 and 2015, indicating a history of such actions despite its current high share price [9]. Group 3: Strategic Implications of a Stock Split - A stock split could make Netflix eligible for inclusion in the Dow Jones Industrial Average, as its market cap of $500 billion exceeds many current members [10]. - Analysts project Netflix's revenue to grow by 17% year-over-year to $11.5 billion, with earnings per share expected to rise from $5.40 to $6.94 [11]. - Despite a high price-to-earnings ratio of 50, Netflix's dominance in global video entertainment and growth potential through advertising and local content strategies suggest a favorable outlook [12].