If You Had Purchased $100 of Netflix in 2009 (NFLX)
By*Greg DePersio*| February 20, 2016
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The year 2009 was dicey for investing in stocks. Major United States indices fell to their lowest levels in over a decade amid the largest*financial crisis*since the Great Depression. Investors who braved the storm and purchased stock in 2009 were rewarded handsomely over the subsequent years, for the recovery was robust and sharply V-shaped.
As impressive as the market's overall performance has been since 2009, certain individual stocks have fared even better. One of these stocks is Netflix Inc. (NASDAQ:*NFLX). The following describes how you would have fared over the years had you purchased $100 in Netflix stock in 2009.
2009: The Slow Climb Begins
Netflix traded for $5 per share on Jan. 1, 2009. Your $100 would have purchased 20 shares, which would have slowly appreciated through the year. The company partnered with Sony and other consumer electronics manufacturers to stream its product over the PS3, smart TVs and other devices. This move solidified its focus shift from DVD delivery to on-demand content.
The stock closed out 2009 trading at $7.93 per share. At this point, your $100 would have increased by over half, to $158.60. The year's high point came in October, when the stock briefly hit $8.81 per share. However, this mark would soon be eclipsed in a big way in 2010.
2010: Taking Off
The company's commitment to expanding its reach by providing its content through various electronic devices bore fruit in 2010. In addition to partnering with Sony to stream over the PS3, Netflix became available on*gaming consoles*such as the Nintendo Wii, as well as on an array of Apple products, including the iPad, iPhone and iPod Touch. Additionally, the company began expanding its international footprint. It offered services in Canada for the first time and reached out to markets in Latin America and the Caribbean.
Netflix's share price soared in 2010. From a starting point of under $8 per share, it closed the year at $25 per share, an increase of over 200%. By the end of 2010, the stock's value had grown to $500, or exactly five times your purchase price.
2011-2012: Turbulence Hits
The year 2011 started out great for Netflix investors. The stock continued rising and hit $38 per share by April. However, trouble was ahead. The company made an ill-advised price hike and*lost 800,000 subscribers*during the third quarter of 2011. Its stock plummeted to $9 per share and sat under $10 per share for the remainder of 2011 and most of 2012.
2013-2015: Robust Recovery
By the beginning of 2013, Netflix had become the comeback story of the year. It started the year at $13 per share and continued to grow, closing out 2013 near $50 per share. The company's management realized its DVD-by-mail business was a dying industry, and decided not to fret over those lost subscribers. Instead, the company positioned itself to capitalize on the rapidly growing trend toward on-demand streaming, beating out competitors such as Hulu and Amazon.
In July 2015, Netflix stock split seven-for-one, meaning your ownership increased by seven shares for every share you owned before the split. Thus, your 20 shares became 140 shares overnight. In addition, each of your increased number of shares was trading as high as $123.33 by October 2015. At this point, your $100 investment is worth $17,266.20. A pullback ensued, but the share price was still above $100 by the end of 2015.
2016 and Beyond
The fact Netflix has receded from its October 2015 highs appears more a symptom of broader market turbulence than of fundamental deficiencies in the company. Its year-over-year revenue growth is still over 20%, its*current ratio*is above 1.5 and the company has $3.69 billion in free cash flow. Netflix shares were trading at $94.41 in January 2016, making your 140 shares, the result of a $100 initial investment, worth $13,217.40.
Read more:*If You Had Purchased $100 of Netflix in 2009 (NFLX) | Investopedia*http://www.investopedia.com/article...ased-100-netflix-2009-nflx.asp#ixzz40o82E2Og*
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By*Greg DePersio*| February 20, 2016
*SHARE
*
*TWEET
The year 2009 was dicey for investing in stocks. Major United States indices fell to their lowest levels in over a decade amid the largest*financial crisis*since the Great Depression. Investors who braved the storm and purchased stock in 2009 were rewarded handsomely over the subsequent years, for the recovery was robust and sharply V-shaped.
As impressive as the market's overall performance has been since 2009, certain individual stocks have fared even better. One of these stocks is Netflix Inc. (NASDAQ:*NFLX). The following describes how you would have fared over the years had you purchased $100 in Netflix stock in 2009.
2009: The Slow Climb Begins
Netflix traded for $5 per share on Jan. 1, 2009. Your $100 would have purchased 20 shares, which would have slowly appreciated through the year. The company partnered with Sony and other consumer electronics manufacturers to stream its product over the PS3, smart TVs and other devices. This move solidified its focus shift from DVD delivery to on-demand content.
The stock closed out 2009 trading at $7.93 per share. At this point, your $100 would have increased by over half, to $158.60. The year's high point came in October, when the stock briefly hit $8.81 per share. However, this mark would soon be eclipsed in a big way in 2010.
2010: Taking Off
The company's commitment to expanding its reach by providing its content through various electronic devices bore fruit in 2010. In addition to partnering with Sony to stream over the PS3, Netflix became available on*gaming consoles*such as the Nintendo Wii, as well as on an array of Apple products, including the iPad, iPhone and iPod Touch. Additionally, the company began expanding its international footprint. It offered services in Canada for the first time and reached out to markets in Latin America and the Caribbean.
Netflix's share price soared in 2010. From a starting point of under $8 per share, it closed the year at $25 per share, an increase of over 200%. By the end of 2010, the stock's value had grown to $500, or exactly five times your purchase price.
2011-2012: Turbulence Hits
The year 2011 started out great for Netflix investors. The stock continued rising and hit $38 per share by April. However, trouble was ahead. The company made an ill-advised price hike and*lost 800,000 subscribers*during the third quarter of 2011. Its stock plummeted to $9 per share and sat under $10 per share for the remainder of 2011 and most of 2012.
2013-2015: Robust Recovery
By the beginning of 2013, Netflix had become the comeback story of the year. It started the year at $13 per share and continued to grow, closing out 2013 near $50 per share. The company's management realized its DVD-by-mail business was a dying industry, and decided not to fret over those lost subscribers. Instead, the company positioned itself to capitalize on the rapidly growing trend toward on-demand streaming, beating out competitors such as Hulu and Amazon.
In July 2015, Netflix stock split seven-for-one, meaning your ownership increased by seven shares for every share you owned before the split. Thus, your 20 shares became 140 shares overnight. In addition, each of your increased number of shares was trading as high as $123.33 by October 2015. At this point, your $100 investment is worth $17,266.20. A pullback ensued, but the share price was still above $100 by the end of 2015.
2016 and Beyond
The fact Netflix has receded from its October 2015 highs appears more a symptom of broader market turbulence than of fundamental deficiencies in the company. Its year-over-year revenue growth is still over 20%, its*current ratio*is above 1.5 and the company has $3.69 billion in free cash flow. Netflix shares were trading at $94.41 in January 2016, making your 140 shares, the result of a $100 initial investment, worth $13,217.40.
Read more:*If You Had Purchased $100 of Netflix in 2009 (NFLX) | Investopedia*http://www.investopedia.com/article...ased-100-netflix-2009-nflx.asp#ixzz40o82E2Og*
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