Netflix, Inc. has joined the $600 club, hitting its all-time high level and becoming one of the four S&P 500 stocks that are over that level. The surge in stock comes followings news that the video streaming company was in negotiation with Alibaba Group Holding Limited and other Chinese internet broadcasters.
After opening the market 2.77% higher, Netflix stock jumped 5.34% to $618.18, which is its highest ever level since its inception May, 2013, as of 2:33PM EDT on Friday. The share price has mounted 79.96% year-to-dated (YTD), compared to S&500 growth of 3.3%.
Earlier on Friday, the Wall Street was filled with excitement on news the streaming-giant is in talks with Alibaba, Wasu Media Holding Co and other internet broadcaster in China, as it furthers its FY16 global expansion plans. The move enables Netflix to offer its video-streaming services to 1.4 billion Chinese people. The Chinese internet based content market is expected to become a $14 billion dollar market by 2018. The company recently introduced its services in Australia, Cuba and Japan.
The Chinese tech giant is expected to roll in more cash as according to news they would want to locate it’s headquarter near to its competitor, Amazon, instead of a tech-hub in San Francisco. This move would allow the company to easily recruit staff from similar companies and would also have the benefit of paying less rent compared to San Francisco.
One of the commercial brokers who are closely related to the deal said the lease goes through this year. It is said that Alibaba covers around 8,000 square feet space. Another real estate broker reports that Alibaba is very unclear regarding its plans to get a relatively small permanent office of 5,000 square feet or to acquire 80,000 square feet space for its headquarter.
Netflix cross $600 just 22 sessions, or almost a month, after surpassing the $500 mark on April 16, when it published its first quarter earnings of fiscal year 2015 (1QFY15). Netflix stock was trading 13.02% at $537.37 in the aftermarket trading on April 16. The streaming-giant surpassed 62 million global subscribers target and thrashed all the Wall Street’s estimates. The company cited strong international expansion for 1QFY15 results.
The acceleration of stock from $500 to $600 was the fastest-ever of $100 milestone achievement in the history of the stocks. Netflix took 307 sessions, or roughly 14.5 months, to reach $500 mark, from $400 on January. Before February 12, 2004, when Netflix split its stock 2-for-1, the highest split-adjusted closing stock price was $38.83, which is equivalent to $77.66 on a pre-split basis.