If You Invested Right After Netflix’s IPO (NFLX)

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Netflix Inc. (NFLX) is a video streaming giant that provides more than 167 million users with syndicated as well as original TV shows and movies. Since its humble beginnings as a mail-order movie and TV show delivery service in 1997, the company has come a long way, effectively killing its biggest competitor, Blockbuster Entertainment.

Netflix went public on May 23, 2002, and an investment of $1,000 on Netflix’s initial public offering, or IPO, would have grown to over $528,000 after stock splits as of August 2021. That’s a gain of 52,810% over 19 years.

Key Takeaways

  • Netflix went public on May 23, 2002, with an initial public offering (IPO) price of $15 per share at the time.
  • Netflix was the best-performing stock in the S&P 500 from 2010 through 2019.
  • Had you purchased $1,*14000 shares of Netflix stock at its original IPO price in 2002 and held onto the stock through two stock splits, you would have just over 933 shares of stock valued at $528,100 (as of August 30, 2021).
  • Your return on investment would have been an astonishing 34,340% over almost 18 years.

Early Investment in Netflix

If you invested $1,000 right after Netflix’s IPO, assuming you purchased each share of Netflix at its IPO price of $15, you would have 66 shares. Netflix, initially at least, did not continue higher; instead, it traded in a downtrend until early October 2002, where it hit a low of $4.85. But things turned around for the company and the early investors. 

2004 Two-For-One Netflix Stock Split

On Feb. 11, 2004, Netflix closed at $71.96 per share. On Feb. 12, 2004, Netflix issued a two-for-one stock split, so those 66 shares would double to become 132 shares. On Feb. 12, 2004, Netflix closed at $37.30 per share. The investment of $990 would have been worth $4,923.60, a return on investment, ROI, of 397%.

Thereafter, Netflix had its ups and downs but overall the stock kept climbing, crossing one price milestone after another.

Source: FactSet

In a stock split, the number of shares outstanding increases by a specific ratio—such as 2-for-1 or 3-for-1—but the total dollar value of the shares remains the same compared to pre-split amounts because the split does not add any real value.

2015 Seven-For-One Netflix Stock Split

Nearly 11 years later, Netflix reported its quarterly earnings and shares made a new all-time high. The company announced another stock split, this time a seven-for-one stock split on July 15, 2015. On July 15, 2015, your 132 shares would have become 924 shares. On the date of the stock split, Netflix closed at $98.13 per share. The total position was worth $90,672.12 at the close, a 9,058% increase over the initial investment amount.

Present-Day Value From a Netflix IPO Investment

Almost 18 years after it made its stock market debut, Netflix is a part of the elite FANG stocks. As of Feb. 4, 2020, the stock traded around $369 a share, making the initial $990 investment worth $340,956 using the calculation of 924 shares multiplied by $369 per share. That’s a stunning return on investment of 34,340%. But, Netflix also benefitted greatly from the fallout from the global COVID19 pandemic, which led to forced lockdowns, quarantines, and self-isolation. By the end of August 2021, the stock price had risen to nearly $570 per share, hitting all-time highs.