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October 22, 2021

The hits keep on coming for Netflix. The streaming video giant posted a better-than-expected earnings report Tuesday, beating Wall Street’s expectations for both subscriber and revenue growth.

Netflix, whose recently released show “Squid Game” turned into a worldwide phenomenon and reportedly created $900 million worth of value for the company, saw its stock trading around $626 on Wednesday afternoon. 

If you had invested $1,000 in Netflix on Oct. 19, 2011 at a share price of $15.63, the market value of your shares would be $40,430 today, reflecting a return of more than 3,900%, according to CNBC calculations. In contrast, a $1,000 investment in the S&P 500 index would have seen a 356.8% return over the same time period and would be worth about $4,568.

Over the same time period, Netflix’s market cap increased from $5.7 billion to $279 billion as of Wednesday morning.

Netflix’s stock price has increased in tandem with the company itself as it has consistently grown from a popular entertainment service to a dominant streaming platform, active in over 190 countries.

At the end of 2011, Netflix had 23.5 million subscribers. On Tuesday, the company revealed that it now has around 214 million paying subscribers and expects to add another 8.5 million in the next quarter. Its closest competition, Disney Plus, last reported a subscriber count of 116 million.

Netflix premiered its first original program, “House of Cards,” in 2013, and now has more than 6,000 original shows and movies. Earlier this year, the company said it planned to spend $17 billion on original content in fiscal 2021, with co-CEO Reed Hastings saying Tuesday that Netflix is in “uncharted territory” and has “so much content coming in Q4 like we’ve never had.”

Netflix is also venturing into new industries. On Tuesday, it told investors that it has begun its push into video games in select countries, although “it remains very early days for this initiative.”

But Netflix’s success hasn’t come without setbacks. The streamer is currently under fire from some employees, as well as GLAAD and other LGBTQ advocacy groups, for a Dave Chapelle comedy special that has been criticized as transphobic. It recently fired an employee for allegedly leaking information about the special to Bloomberg.

With a number of employees planning a walkout in protest Wednesday, co-CEO and content chief Ted Sarandos said in an interview with Variety that he “screwed up” his response to employee concerns by not reacting with more “humanity,” but reiterated that the comedy special would remain on the platform.

Despite Netflix’s strong stock growth, any individual stock can overperform or underperform and past returns do not predict future results. Make sure to carefully research your options before investing. 








SOURCE: CNBC
IMAGE SOURCE: PIXABAY