Netflix Announces 10-for-1 Stock Split. Here's What Investors Need to Know.

Core Viewpoint - Netflix has announced a 10-for-1 stock split, marking only the third time in its history, which has generated significant interest among investors and raises questions about the implications of such a move [3][5]. Business Performance - Netflix has a substantial audience of over 500 million people across 190 countries, broadcasting in 50 languages [1]. - The company's stock price has surged, climbing 44% over the past year, and showing increases of 116% and 936% over the last five and ten years, respectively [2]. - For the first nine months of 2025, Netflix reported a revenue growth of 15% year-over-year to $33.1 billion, with earnings per share (EPS) rising 26% to $20.12 [14]. Stock Split Details - The stock split will be effective for shareholders of record as of November 10, 2025, with additional shares distributed after the market closes on November 14, 2025 [5][6]. - Post-split, shareholders will own 10 shares valued at approximately $110 each, based on the current trading price of around $1,100 per share [7][8]. Investor Psychology and Market Impact - Stock splits can create excitement among investors, potentially driving up stock prices; historically, companies that split their stock see an average price gain of 25% in the year following the announcement [10]. - The motivation behind Netflix's split includes making shares more accessible to employees participating in the stock option program [10]. Future Outlook - Netflix's operating margin has improved, reaching 31.3% in 2025, up from 27.4% in 2024 and 20.9% in 2023, indicating increased profitability despite ongoing content investments [14]. - Upcoming releases, including the final season of "Stranger Things" and other popular series and films, are expected to drive further engagement and revenue growth [15]. - The stock is currently priced at 34 times next year's expected earnings, which is considered a fair valuation given the company's anticipated revenue growth of approximately 12% annually over the next five years [16].