Netflix Approves 10-for-1 Stock Split to Make Shares ‘More Accessible’ to Employees Participating in Stock Options Program

Netflix, the global streaming giant, has announced that its board of directors has approved a 10-for-1 forward stock split of the company’s common stock. This strategic move aims to significantly reduce the per-share market price, making shares more attainable, particularly for employees participating in Netflix’s stock option program. The decision reflects an ongoing effort to enhance the accessibility and appeal of equity compensation for its workforce.

Understanding the 10-for-1 Stock Split

A stock split is a corporate action where a company increases the number of its outstanding shares by dividing existing shares into multiple new shares. In a 10-for-1 forward stock split, each existing share is divided into ten new shares. While the number of shares increases, the overall market capitalization of the company remains unchanged. Consequently, the price per share decreases proportionally.

For instance, if Netflix’s stock closed at $1,089.00 per share prior to the split, as it did on the day of the announcement, a 10-for-1 split would effectively reduce the price of each share to approximately $108.90. Concurrently, a shareholder owning one share before the split would now possess ten shares, maintaining the same total value of their investment.

Details of Netflix’s Stock Split Implementation

The operational aspects of Netflix’s 10-for-1 stock split have been meticulously planned. Shareholders of record as of the close of trading on Monday, November 10, 2025, will be eligible to receive additional shares. Following the close of trading on Friday, November 14, 2025, each eligible shareholder will be issued nine additional shares for every one share they held on the record date.

Trading on a split-adjusted basis is anticipated to commence at market open on Monday, November 17, 2025. This allows for a brief period for the administrative processing of the new shares. The mechanism for this split involves an amendment to the company’s amended and restated certificate of incorporation, a standard procedure for such corporate actions.

Enhancing Employee Stock Option Program Accessibility

The primary rationale behind Netflix’s decision to approve a 10-for-1 stock split is to reset the market price of its common stock to a range that is “more accessible to employees who participate in the Company’s stock option program.” Employee stock options are a crucial component of many companies’ compensation packages, aligning employee incentives with shareholder interests.

When share prices become exceedingly high, the cost associated with exercising stock options can be substantial, potentially limiting the ability of some employees to participate fully in these programs. By lowering the per-share price, Netflix aims to make it easier for employees to purchase shares, thus maximizing the benefit and motivational impact of their equity compensation. This move underscores Netflix’s commitment to its employees and its belief in shared success.

Historical Context and Market Reaction

This is not Netflix’s first foray into stock splits. The company previously enacted a seven-for-one stock split that became effective on July 14, 2015. Such past actions indicate a pattern of using stock splits to manage share price and improve liquidity and accessibility over time as the company’s stock value appreciates.

Following the announcement of the 10-for-1 split, Netflix shares saw an immediate positive reaction, rising more than 3% in after-hours trading. This suggests a favorable perception among investors, who often view stock splits as a sign of management’s confidence in the company’s future growth and a move that could potentially attract a broader base of individual investors. While the immediate impact on stock performance is often psychological, the underlying fundamentals of the company remain unchanged by a split.

In terms of recent financial performance, Netflix reported that for the third quarter of 2025, revenue climbed 17% to $11.51 billion, aligning with forecasts. However, its earnings per share fell short of Wall Street expectations, primarily due to a one-time charge of $619 million related to a dispute with Brazilian tax authorities.

Conclusion

Netflix’s approval of a 10-for-1 stock split represents a strategic financial maneuver designed primarily to enhance employee participation in its stock option program by making shares more affordable. This action, while not altering the company’s intrinsic value, is expected to improve share liquidity and potentially broaden its investor base. As the streaming giant continues to navigate a dynamic market, such decisions reflect its proactive approach to managing its equity structure and fostering employee engagement.