Netflix plans 10-for-1 stock split that will take its price below $1,000

Streaming giant cites need to make its share price more accessible to employees Netflix shares closed above $1,000 on Thursday. Netflix Inc. announced plans Thursday to conduct a 10-for-1 stock split after its shares dipped to a six-month low . Netflix said the move was designed to make it easier for its employees to participate in the company's stock-option program after its shares topped $1,000 at the beginning of the year and hit an all-time high in late June. "The purpose of the stock split is to reset the market price of the company's common stock to a range that will be more accessible to employees who participate in the company's stock-option program," the streaming giant said in a statement. Netflix shares (NFLX) closed at $1,089 on Thursday, down nearly 19% from their peak at the end of June, and off 12% in just the past 10 days. Shares jumped 3.2% in after-hours trading on news of the split. At Thursday's close it was ninth-highest-priced stock in the S&P 500, according to Dow Jones Market Data. The decision to split comes after ServiceNow Inc. (NOW) announced its own stock split on Wednesday. There have only been three effective stock splits among S&P 500 SPX components so far this year, according to Dow Jones Market Data, versus 18 in 2024. Netflix said shareholders of record as of Nov, 10 would be given nine additional shares for every one they own, and that trading of the stock on the split-adjusted basis would begin on Nov. 17. After a rapid run-up in Netflix's share price in the spring and early summer, analysts began raising concerns that the share price had gotten ahead of the company's ambitious growth plans. Earlier this year, Netflix set an ambitious target of doubling revenue and reaching a market capitalization of $1 trillion by 2030, and has pushed to expand into several new areas such as theme parks, live sports and advertising. The company currently has a market cap of $466 billion. Some analysts had argued that the upside for investors was likely a few years down the line and that much of that benefit had already been factored into the stock price, making its sky-high valuation a bit rich. Netflix reported gains in net profit and revenue in its third quarter, but missed expectations on profit significantly due to a one-time tax hit the company took as the result of a legal dispute in Brazil. The company's revenue rose to $11.51 billion in the third quarter, up from $9.83 billion in the year-earlier period. That was in line with the $11.51 billion that analysts had predicted. The streaming giant said it expects revenue to continue to grow in the fourth quarter due to gains in subscribers, increased pricing and boosts to ad revenue, and forecast that it would finish the year with $45.1 billion in revenue, in line with previous guidance. It did revise down projections for its full-year operating margin, a measure of profitability, to 29% from 30% due to currency-exchange issues and the impact of the Brazilian tax matter. Most analysts said they considered the earnings miss to be a blip and expect the company's developing ad business and strong content slate to deliver solid growth in the upcoming quarters. -Lukas I. Alpert -Emily Bary This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

Netflix plans 10-for-1 stock split that will take its price below $1,000

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