Netflix Inc. (NFLX) is a video streaming giant that provides more than 100 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 $990 on Netflix's initial public offering, or IPO, date of May 23, 2002, would have generated over $310,000 after stock splits. that's a gain of 31,260%
Early Investment in Netflix
If you invested $990 right after Netflix's IPO, assuming you purchased each share of Netflix at its IPO price of $15, you would have 66 shares. Netflix 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, 2005, Netflix closed at $37.30 per share. The investment of $990 would have been worth $4923.60, 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.
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 was 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
Exactly 16 years after it made its stock market debut, Netflix is a part of the elite FAANG stocks and was trading around $369 a share making the initial $990 investment worth $340,956 using the calculation 924 shares * $369/sh. That's a stunning return on investment of 34,340%.