Why did Netflix do a 10-for-1 stock split?

Netflix executed a 10-for-1 stock split in mid-November to make its shares more affordable and to position itself for potential inclusion in the Dow Jones Industrial Average.

How does the Dow Jones Industrial Average weighting affect Netflix's split?

The Dow is price-weighted, meaning higher stock prices have more influence. Netflix's previous high price made it an outlier, but the split makes its price more compatible with the index.

What is the current share price of Netflix after the split?

Following the 10-for-1 stock split in mid-November, Netflix shares are trading around $107.47.

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Netflix Stock Split: Dow Jones Dream?

3 Dec

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Summary

Netflix executed a 10-for-1 stock split in mid-November.
The split lowered Netflix's share price to around $107.
The Dow Jones Industrial Average is price-weighted, not market-cap weighted.

Netflix recently implemented a 10-for-1 stock split, adjusting its share price to a more accessible range around $107. This financial maneuver is not merely cosmetic; it signals the streaming giant's strategic ambition to be recognized among established industrial leaders on Wall Street. With a significant market capitalization already in place, the company's former high stock price was an anomaly among elite companies.

The rationale behind this split is deeply tied to the unique structure of the Dow Jones Industrial Average. Unlike other market indices, the Dow is price-weighted, meaning a stock's price, rather than its total market value, dictates its influence on the index. A stock trading at over $1,000 would have an outsized and potentially destabilizing effect on the index.

This price-based barrier had previously precluded Netflix from Dow Jones consideration, irrespective of its industry standing. The recent stock split effectively addresses this, recalibrating Netflix's share price to align with the index's requirements. This strategic repricing positions Netflix as a viable candidate for inclusion in the Dow Jones Industrial Average.