Netflix announces 10-for-1 stock split as company aims to make stock more accessible for employees

Netflix (NFLX) on Thursday announced it will split its stock 10-for-1, meaning Netflix shareholders will receive 10 shares for every one share of the company they currently own.

Netflix stock, as a result, will trade at one-tenth of its current price. Shares closed at $1,089 on Thursday.

In a statement, the company said the move was being made 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."

Netflix stock was up as much as 3% on Thursday following the announcement.

NasdaqGS - Delayed Quote•USD

(NFLX)

Follow View Quote Details

1,089.00

-11.41

(-1.04%)

At close: 4:00:00 PM EDT NFLX^GSPC

Advanced Chart

The company said its stock will begin trading on a split-adjusted basis on Nov. 17. If the stock were to be split right now, for instance, it would trade around $110 per share.

The per-share price of any company's stock is the result of simple arithmetic — the company's market value divided by the number of shares outstanding.

In theory, any company's stock can be any price, and that price would have no bearing on the firm's broader value. But some academic research has suggested shares outperform following the announcement of a stock split, indicating investors see there being some meaningful information conveyed by management in announcing the split.

Thursday's announcement marks the third time that Netflix has split its stock, having announced a 7-for-1 stock split back in 2015 and a 2-for-1 split in 2004.

Since its IPO back in 2002, Netflix stock has gained over 100,000%.FILE - This Aug. 13, 2020 photo shows a logo for Netflix on a remote control in Portland, Ore. (AP Photo/Jenny Kane, File)·ASSOCIATED PRESS

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance

View Comments