Netflix Inc. is planning to raise its share authorization by approximately 30 times, according to the regulatory filings. The online Subscription Video on Demand service is forcing shareholders to support a considerable increase in its stock authorization, a move which most speculates might drive to possible stock split.
The online streaming giant believes that an increase in its stock authorization from a simple 170 million at the moment to a decent 5 billion, as reported in regulatory filing. Company’s annual general meeting is scheduled on June 9, where investors are most likely to vote for the strategy.
The stock price of the company has traded more than the mark of $300 for over an year and a half. The step to pursue increased share authorization indicates the Netflix’s primary move towards a possible stock split. Majority of Wall Street researchers are also supposing the company to take the same step. An analysts at Bloomberg, Paul Sweeney said, “The Company is preparing for a stock split, and would like to make its shares more attractive to retail investors. Reducing the ‘per share price’ via a stock split is one way to do that.”
Shares of the live video streaming company dashed higher to $454.57 after going green by 3.4% at market close on Friday, which is nearly 7% less than the company’s all time high of $489.29 in last year September. Due to the increasing rivalry in the online streaming industry from Amazon Prime Video, HBO, and Netflix’s share have already been on unstable streak in the past couple of months. However, the company’s stock was still able to pocket gains of around 32% in the first quarter of current fiscal year, although still comparatively less than its all-time record high.
Annie Marie Squeo, a spokesperson of Netflix said in her statement, “At a lower price point, there’s a perception the stock is more accessible,” with around 62 million common stock outstanding as reported in company last year financial results, the decision to stock split is seem to be a good move in order to raise the required funding, especially at the time when the company is looking to expand its operations across the globe.
Netflix Inc. published its first quarter earnings results of current fiscal year on April 16. The streaming giant reported earnings of $0.66 less than analyst’s expectation of $0.87. The earnings miss was the first time in the previous 36 quarters that Netflix was not able to meet analyst’s estimation. It also reported $1.1573 billion in revenues less than $1.574 estimated by analysts.