Why Netflix Still Looks Like a Buy After Its 10-for-1 Stock Split

Core Viewpoint - The stock market is experiencing turmoil, particularly affecting major tech companies, as investor sentiment declines due to economic uncertainty and inflationary pressures [1][2]. Group 1: Market Conditions - Many leading tech stocks are declining as investor confidence wanes regarding the economy's future [1]. - There is uncertainty surrounding the path of interest rate cuts, which is contributing to the bearish sentiment in the market [1]. - The current market situation raises the question of whether it is a good time to invest amidst selling pressure, with past V-shaped recoveries in mind [2]. Group 2: Netflix's Stock Split - Netflix has announced a 10-for-1 stock split, with shares trading around $113, reflecting a 3% increase on the day of the announcement [3][5]. - The company reported a 17% revenue growth, reaching $11.5 billion in the last quarter, and captured 8.6% of the overall television viewing market share [5]. Group 3: Implications of the Stock Split - Stock splits do not fundamentally change a company's value but can increase the investor base by making shares more accessible [6][7]. - The reduction in share price from over $1,000 to the low-three-digit range allows more investors to participate, potentially increasing capital flows into Netflix [7]. - For institutional and large retail investors, the stock split reduces the price of options tied to Netflix, enhancing liquidity and improving the outlook for bullish investors [8].