Netflix approves 7-for-1 stock split after shares hit all-time high
Netflix, after its shares closed at an all-time high of $681.19 each Tuesday, said its board approved a seven-for-one stock split to take effect July 14.
Companies enact stock splits in order to make high-priced shares more affordable, thereby widening the pool of potential shareholders. While the Netflix stock split won't necessarily change the company's valuation, "it does make it easier for small investors to own shares," said BTIG Research analyst Rich Greenfield.
In after-hours trading Tuesday, Netflix shares were up 2.7%, to $699.60 per share.
Netflix's stock split will be in the form of a stock dividend of six additional shares of common stock for each outstanding share of common stock. The dividend will be payable on July 14, 2015, to stockholders of record at the close of business on July 2.
Netflix stock will begin trading at the post-split price on July 15. The company said shares purchased between July 2 and July 14 will come with a "due-bill," which will entitle the buyer to six additional shares for each share purchased.
The new shares will be delivered by Netflix's transfer agent, Computershare Trust Co.
Netflix shares have climbed to record highs in the past three months, particularly on investor enthusiasm about the company's international expansion plans.