Will Netflix Announce a Stock Split on Thursday?

Rick Munarriz, The Motley Fool

Wed, Apr 16, 2025, 8:55 AM 5 min read

For a company that often releases an entire season of a show at the same time, Netflix (NASDAQ: NFLX) knows that its audience doesn't like to wait. Netflix investors will have to show some patience this earnings season. The world's top premium video service will report its first-quarter results on Thursday afternoon. With the market closed on Friday, investors will have to wait four days to gauge the market's reaction on Monday morning of next week.

Giving the market a full extended trading holiday to ponder a telltale release isn't a problem. Investing should be a crock pot, and not a microwave oven. However, it does lead one to wonder if the extra time could inspire the digital flick flicker to do something it hasn't done in a long time. Is Netflix ready to announce its first stock split in nearly 10 years?

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Netflix takes its stock splits seriously. It has now been trading publicly for almost 23 years, and it has only given its investors a pair of stock splits. There was a 2-for-1 move in February 2004, less than two years after Netflix started trading. It declared a more ambitious 7-for-1 split in the summer of 2015.

The shares are trading substantially higher than they were at either of the previous split decisions. It's also a different time. There's no longer the same kind of pressure that there was two decades ago to keep a stock at an accessible double-digit price point. This doesn't mean that it would be a bad idea for a stock split. Let's just go over a few of the reasons why a stock split could be more than just a zero-sum game for Netflix.

• The ease of buying fractional shares these days doesn't make it prohibitive for individual investors to buy into a stock like Netflix that's approaching $1,000, but it is a high barrier in the options market since those contracts represent a round lot of 100 shares apiece. Someone would have to own nearly $100,000 worth of Netflix to execute a single covered call, for example.

• A couple of years ago, the titans of tech wore their rising price tags as vanity plates. That trend has reversed. Three of the country's four most valuable companies have declared stock splits over the past five years.

• Netflix isn't likely to be added to the Dow 30 anytime soon, but it's certainly not going to happen with its current sticker price. The Dow 30 is a price-weighted index, so Netflix's moves would impact the index at nearly double the pace of its priciest component. Netflix's sensitivity would be almost 5 times greater than its most valuable component.