Today, the red letter “N” on the black screen is associated with high-quality films and TV series. However, before gaining in popularity, Netflix sold and rented DVDs. Back then, it had only 30 employees and 925 film releases. A year later, the company began offering customers a paid subscription. In two years, it already had 300,000 regular customers. Netflix's success has been fickle and the management has made a bet on streaming content.

Today, Netflix has clients in 190 countries. The number of official subscribers of the streaming service amounted to 208 million as of July 2021. The company's market capitalization has reached $239 billion. How not miss the chance and earn money on Netflix shares? You will find out about it in this article.

Info

  • Established in: 1997
  • Founders: Reed Hastings, Mark Randolph
  • IPO: May 23, 2002
  • Ticker: NFLX
  • Stock Exchange: NASDAQ
  • CUSIP Number: 64110L106

In 2002, Netflix was listed on the NASDAQ Stock Exchange in New York. The starting price of $15 per share grew to $16.75 by the end of the first trading day. During that day, 5.5 million shares were sold. The share price had been rising steadily yet slowly for a long time. In 2015, the company carried out a stock split in the ratio of 7:1. As a result of the split, shares went up. The positive dynamic persists to this day.

Compare:

  • On January 5, 2015, NFLX shares were trading at $47.31.
  • On January 5, 2021, NFLX shares were trading at $520.80.

The value of Netflix shares in the stock market has amounted to 1000.8% for 6 years.

Netflix today

Following the company's earnings report for the first quarter of 2021, Netflix shares slipped in price. The influx of new subscribers was 2 million less than the forecast (4 million instead of 6 million). The market reaction was quite predictable. Besides, this is one of the indicators.

At the same time, Netflix’s revenue remains the key indicator. The company reduced its expenses for the production of content in the first quarter, and the profit surged by 140.7% to $1.71 billion. The share price rose by 3.8%, to $540.67 from $520.8.

The streaming service also did not revise the forecast for the second quarter of 2021. The company is expected to attract only 1 million new users, anticipating an increase in indicators by the autumn, in the third or fourth quarter.

5 reasons why traders are interested in Netflix

  • Market leader. Along with Facebook, Amazon, Apple, and Alphabet, Netflix is one of the five largest tech companies, FAANG. Major market players are bullish about the company and recommend buying Netflix shares.
  • Versatility. Today, Netflix is more than just a streaming platform. This year, the company launched an online store that sells products with the merch of the platform's products. It continues to look for new markets, gaming in particular.
  • Growth potential. Netflix has good growth potential. The number of Internet users and the time spent online continues to increase. Even the pandemic has had a positive effect and helps Netflix to break records. For this reason, many traders expect Netflix to expand its presence in India and Asia.
  • The possibility of a drastic change in the business model. Today, the platform manages its profit by reducing production costs and increasing the subscription price. Netflix has not integrated advertising into its platform yet. If it does, its profit may skyrocket. A study by Hub Entertainment Research revealed that 58% of users in the US are ready to put up with advertising if the subscription price is reduced.

How to earn money on Netflix shares

There are several ways to make a profit on Netflix shares. The easiest of them is available to every InstaForex client. All you need is to take just a few steps:

  1. Get acquainted with the terms of execution of CFD transactions with Netflix shares at InstaForex.
  2. Open an account.
  3. Install a trading platform.
  4. Use technical analysis tools to find the entry point to open a trade.
  5. Carefully monitor the general trends in the market and make transactions.

Netflix does not pay dividends. Therefore, CFDs trading remains the main instrument for yielding a profit. Here we can talk about less dynamic Buy/Sell transactions and scalped trading during periods of market volatility (before the release of reports, the start of the reporting season, and management statements). Do not forget about global and industry risks. The impact of the pandemic on Netflix has been rather small. Moreover, competition among streaming services is growing. Track price movements of The Walt Disney and Amazon shares using this link.

Summary

Despite a weak start, Netflix continues to hold a leading position in the market in 2021. The company is actively creating new content and looking for alternative ways to make a profit. The platform has growth potential, and high demand for its products confirms that. Of course, there are risks that should be taken into account. Catch up on the latest news, remember to diversify your portfolio, and try to earn money together with Netflix and InstaForex.