Purchasing a Single Share of Netflix at Its Initial Public Offering (IPO), Here's the Current Number of Shares You'd Hold

Purchasing a Single Share of Netflix at Its Initial Public Offering (IPO), Here's the Current Number of Shares You'd Hold

Netflix, the groundbreaking entity that's given traditional entertainment a run for its money, has been dominating the industry for the past three decades. Today, its shares are trading above the grand sum of $1,000, sparking whispers of a potential stock split.

Let's delve a little deeper into the journey of Netflix shares, tracing their roots back to when they first started selling on the Nasdaq Stock Market.

Navigating Netflix's Stock Journey

In 1997, Netflix, a DVD-by-mail service looking to give Blockbuster a run, made its debut. In 2002, it officially joined the Nasdaq Stock Market at a humble $15 per share. Two years later, in 2004, Netflix split its stock 2-for-1 when it was trading around $70 per share.

The company's game-changing strategy of streaming video on demand, introduced in 2007, catapulted its stock price nearly to $700. This soaring popularity resulted in a yet another split, this time at a 7-for-1 ratio, in 2015.

If you'd invested $15 in Netflix's initial public offering back in 2002, you'd now be sitting on a sum that's well over $14,000, showcasing the company's remarkable growth.

Is a Third Stock Split on the Cards for Netflix?

In the past, Reed Hastings, co-founder and chairman of Netflix, has advocated for lower stock prices, which could make the shares more accessible to retail investors. Given that Netflix's previous splits occurred at lower price points than its current value, another split is not entirely out of the question.

However, focusing solely on the possibility of a stock split to determine an investment's value is not particularly wise. A split won't increase the intrinsic value of your shares. Instead, pay heed to the company's overall performance.

Netflix continues to reign supreme in the streaming world with a whopping 301 million global paid subscribers, generating $39 billion in revenue and $6.9 billion in free cash flow in the recent past. Their projections for 2025 anticipate a 12%-14% revenue growth and a 16% free-cash-flow growth, indicating continued prosperity for shareholders.

Arguably, the potential stock split of Netflix shares is a topic of interest among shareholders due to the company's current share price surpassing $1,000.

Referring back to Netflix's history, the company announced a 2-for-1 stock split in 2004 when its share price was around $70.

Investing in Netflix's initial public offering in 2002 at $15 per share would have yielded a significant return by 2021, as the shares are now trading above $1,000.

Netflix's financial ratio, such as revenue growth and free cash flow, indicates continuing prosperity for its shareholders, making the company's overall performance a crucial factor to consider apart from the possibility of a stock split.

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