Netflix Stockholders Approve Share Authorization; Stock Hits New All-Time High
Shares of Netflix, Inc. (NASDAQ: NFLX) are surging on Wednesday, after the company received approval from its shareholders on Tuesday for a huge increase in the number of shares it is authorized to issue. The authorization was boosted from 170 million shares to 5 billion shares, almost 30 times higher.
Many have speculated that this could lead to a possible stock split. In fact, CEO Reed Hastings said on Tuesday that management will strive for approval from the Board of Directors, "in due course," to implement a stock split. While he did not reveal the ratio they are considering, CNBC reported that sources familiar with the matter say “it will be somewhere between a five-to-one split and a 10-to-one split.”
Related Link: Is Netflix Stock Split A Good Idea?
The note highlights the fact that a split could make the stock more attractive to retail investors and more affordable to employees participating in its stock option program.”
Shares traded recently at $679.60, up more than $32 (5 percent) on the day. Shares are up more than 98 percent year-to-date.
On top of the share authorization, three other factors are involved in Netflix’s stock’s rally.
- Shareholders also accepted non-binding proposals (1) to vote for Board members annually, (2) to require a simple majority vote for approval of any measures, and (3) to boost their ability to nominate directors.
- International expansion is also driving the stock’s appreciation. The company aims at being present in approximately 200 countries by the end of next year, and is soon arriving to Portugal, Italy and Spain, management said.
- The company has continued to add original content, snatching up Brad Pitt's feature film, "War Machine."
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