![]() So they could even do a 10 for 1 stock split without needing to increase the number of authorized shares, and I doubt they would do a bigger split than that anyway.Ī potentially more potent clue is the current share price. However, that clue is unlikely to be helpful now, as the number of shares authorized is nearly five billion (see table below), while only about 442 million are outstanding at present. This was necessary to complete the split, as the previous number of authorized shares was insufficient to split the stock, so they needed shareholder permission. ![]() The biggest clue last time they split was that they requested an increase in the number of authorized shares outstanding. will split their stock again is to consider the last time they split. In my opinion, the best place to look for clues as to whether Netflix, Inc. I think it's reasonably likely that a split would be at least a short-term catalyst were they to announce one again. The 7 for 1 split followed a meaningful run up in the shares, and they traded up again on the announcement. Then, they didn't split the stock again until 2015 when they split 7 for 1. The first was only a couple of short years after their 2002 IPO, when they underwent a 2 for 1 stock split in 2004. NFLX has done a stock split before, in fact they've split their stock twice. And that's a self-fulfilling prophesy if the split causes demand for the stock to go up. Finally, they can be a near-term catalyst simply because investors think it's a catalyst. It can also have an effect on liquidity in the option market for a firm, as the lower stock price makes 100 share lots (which is the minimum for options) accessible to more investors. While a stock split doesn't change the inherent value of the underlying firm, some investors look at stock splits as a sign of management confidence in the business. The streaming service Netflix ( NASDAQ: NFLX) is ubiquitous, but investors sometimes have less knowledge about its history of splitting its stock. Photo by GoodLifeStudio/iStock Unreleased via Getty Images
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