How much money would you have if you invested $1,000 in Netflix 10 years ago?
Over the last decade, Netflix’s stock price has increased by over 700%. How much would an investor have today if they had purchased $1000 worth of stock in 2013?
Over the last ten years, Netflix has become one of the world’s most well-recognized brands.
Operating in 190 countries with over 247 million subscribers, the streaming service has been a significant source of disruption in the television and film industry. Recently, after months on strike, writers in Hollywood are working under a new contract that requires streaming services like Netflix to provide better pay and conditions to those it employs. Meanwhile, the union representing actors, SAG-AFTRA, is still on the picket line. Netflix and other streaming platforms have been steadfast in their opposition to paying higher residuals to actors, making threats that such a change could bankrupt the industry.
However, some of these arguments ring hollow when compared to the earnings reports of these platforms. Netflix leaders provided a positive outlook in their most recent report, released earlier this week, writing that they are “optimistic about our prospects and the future of entertainment.” Throughout Q3 of 2023, while the company warned that demands from actors and writers could destroy the streaming industry, they were able to purchase $2.5 billion worth of their own shares, driving the price up.
Corporate leaders noted that “like all new technology [...] the internet has driven a lot of change in our industry while also opening up significant new opportunities.” The strikes in Hollywood showed that there will be challenges as the industry adapts to the new landscape, but Netflix believes “that with discipline and a focus on the long term,” it is possible to build “a strong, sustainable streaming business.” As the new contracts for writers take effect, it will be interesting to follow the impact increased payouts will have on Netflix’s balance sheets, not to mention the industry more widely.
A historic decade for Netflix
Since 2013, the value of Netflix’s stock has increased from $47 to $401, or by around 743 percent. Those who made investments over a decade ago, or even before, and held onto their stock will have seen their holdings grow substantially. For instance, a $ 1,000 investment in October 2013 would be worth around $7,433 today.
However, while the value has ballooned, the current price is down from the high of $690 it hit in October 2021. The stimulus provided by the federal government during the pandemic helped many households stay on their feet and led to a massive increase in the value of many stocks. Due to the increased time spent at home, Netflix experienced a significant rise in its stock price as streaming became more popular. The decline in the value of the company’s stock has occurred as many have returned to a pre-pandemic lifestyle.
After record earnings reporting in 2020 and early 2021, the company quickly realized that its growth rate would eventually begin to fall. In response, the company has cracked down on password sharing and increased prices. And, if the latest reports are any indication, these practices and policies are working.