| There are two ways to invest in Netflix: buy its shares directly or speculate on the price movement through CFDs. Currently its share price has dropped sharply due to the loss of subscribers… is this a good opportunity to invest in Netflix at a better price? |
Netflix (NASDAQ:NFLX) is one of the few technology companies that managed to recycle itself after the Internet bubble burst in the early 2000s. Since then, the streaming platform's business has grown exponentially, not only in terms of profits but also on the stock market .
Index
- Netflix Stock History
- Fundamental analysis for investing in Netflix
- Technical analysis of Netflix shares
- Is it a good time to buy Netflix stock?
- How to buy or sell Netflix shares
The decision of invest in Netflix stock it brought a smile to the faces of those who believed in the project from the moment it went public. Of course, that wasn't an easy task.
Just over 20 years later, the financial community is wondering if its golden age is already behind it, with fierce competition on emerging online content platforms.
È still a good time to buy Netflix stock in 2023? We will analyze the shares of Netflix through these 5 points:
- Netflix Stock History
- How to trade Netflix shares with Admirals
- Fundamental and technical analysis of Netflix shares
- Competition concerns
- Buy or sell Netflix shares?
Netflix Stock History
Netflix was founded in 1997, just before the bursting of the Internet bubble, a delicate moment. Netflix's business initially focused on DVD rental, a competitive sector that suffers from the behavior of families, not yet accustomed to consuming content online.
In its financial difficulties, Netflix turned to Blockbuster Video, offering a stake in the company.
| The proposal was rejected by Blockbuster Video, which led to Netflix going public in 2002 under NASDAQ: NFLX to collect 82 million dollars. |
Thanks to this financial gain, the American company began developing the video-on-demand rental service for computers, game consoles and mobile devices (smartphones and tablets) in addition to television.
It is since the 2010s that Netflix has experienced spectacular growth positioning itself internationally with a rapidly growing number of subscribers.
Today it offers online entertainment content in over 190 countries. Ironically, the Blockbuster Video chain of stores went bankrupt in 2013.
The best option to see the evolution of Netflix shares in real time is by downloading the Metatrader trading platform. This will allow you to track any asset and observe its past behavior to try to predict the future.
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Fundamental analysis for investing in Netflix
The following points to analyze will serve to determine the performance of Netflix in the stock market:
- Netflix balance sheet analysis
- Netflix quarterly results
- Netflix dividend payments
Netflix Stocks: Analysis of the results
Thanks to the cash raising, the US company began to develop its video-on-demand rental service for computers, game consoles and mobile devices (smartphones and tablets), as well as for television.
Shares of Netflix have soared more than 5% on the stock exchange over the past 400 years, reaching $700 in November 2021, an all-time high up to that point. However, since then (January 12, 2023), the share price has fallen more than 53%.
Netflix results in 2022
Earnings announcements have a major impact on stock prices.
In this particular case, Netflix announced its Q2022 XNUMX results in October. What was the data?
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Netflix Share Dividends
Even though Netflix went public in 2002, the company pays no dividends to its shareholders. This choice was understandable at the time of the IPO, as Netflix was a growing company and faced difficulties before taking off in the markets in 2010.
But again we have to remember that Netflix is no longer a start-up and, after the soaring prices on the stock market since 2010, it is starting to be difficult to justify the non-payment of dividends. Throughout the uptrend, Netflix's management was able to meet investors' expectations by justifying their choice with the growing value of shares on the stock market.
As new players enter the market, firmly entrenched in other business sectors and already paying dividends to their shareholders, some Netflix investors may choose to swap their shares for those of their competitors.
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Technical analysis of Netflix shares
Now we will look at the different points of view on performance di Netflix on the stock market to determine if it's a good time to buy Netflix stock:
As can be seen in the chart, Netflix's share price has been in a long-term uptrend until November 2021. Since then, Netflix's shares have fallen sharply, especially after the 2021 results release, and then accentuate with the results of the first quarter of 2022 (large loss of subscribers and profits lower than expected).
The price broke the long-term uptrend green line, to continue falling until it reached a resistance zone in the past. Since then, however, Netflix shares have entered an uptrend channel, thanks to its second and third quarter 2022 results.
This presented a great opportunity to invest in Netflix stock at a better price.
Currently, in January 2023, according to Netflix's technical analysis, the price could:
- It continues to rise within the channel until it reaches the resistance line around $380.
- If it breaks out of the downtrend channel, it could head towards the previous support level.
Therefore, before buying Netflix stock it is important to analyze what is happening with the company, as reports such as earnings can have a significant impact on the price.
You can invest in Netflix shares for the long term in anticipation of growth, or trade CFDs on Netflix shares to take advantage of price fluctuations, ie ups and downs.
Split Netflix Stocks: Will It Happen Again?
Netflix's stock market price increased significantly between August 3, 2012 and July 13, 2015, from $52,81 per share to $716,06, an increase of over 1000% in price!
While this price increase reflects the company's success, it has created a problem for management.
Indeed, Netflix wants to be a general company accessible to all, both for its online services and for investors interested in its shares. However, with a Netflix stock price of $700 or more, many people wouldn't have been able to buy Netflix stock.
The second problem faced by the company's finance department was the risk of lack of liquidity, as expensive shares are more difficult to trade on the markets. Therefore, the value of Netflix shares had to be reduced.
Therefore, Netflix decided to split its share price between July 14 and 15, 2015. A split is a division of shares.
➨ The Netflix share price was divided by 7, from a closing price of $700 on July 14, 2015 to $100 per Netflix share at an opening on July 15, 2015.
➨ The demerger also results in a sevenfold increase in the number of Netflix shares outstanding, thereby improving market liquidity.
We've recently seen other big companies, like Apple and Tesla, split their shares, to better reach investors and be more affordable. Will Netflix go this route?
You can open a demo trading account to see the evolution of Netflix shares on the stock market. You trade with virtual funds, so it's a good way to learn and practice in a risk-free environment:
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Is it a good time to buy Netflix stock?
Reading the headlines in the financial press and the topics in the previous section, one gets the sense that Netflix is in a fantastic mood. However, a growing number of competitors are emerging that can send Netflix stock reeling.
For this reason he is investing in studios to gradually enter the world of cinema. Though frowned upon by renowned filmmakers like Steven Spielberg, streaming movies have the potential to breathe new life into an industry that tends to depend on their achievements.
In addition, Netflix and Hollywood studios have agreed to work together to identify the best talent and improve the working and financial conditions of film professionals.
In retrospect, it's a good idea to make buying Netflix stock an option not to be ruled out.
Invest in Netflix Stock with Admirals
Stock CFDs (contracts for difference) allow you to gain leverage, so that you can benefit from attractive investments even with small capital. However, be aware that leveraged trading carries a higher level of risk and is not suitable for all investors.
Admirals is present in all major financial markets and offers the opportunity to invest in Netflix through the MetaTrader trading platform.
If your analysis goes against that of a Netflix shareholder and indicates that the Netflix share price will go down, CFDs allow you to sell Netflix shares short to take advantage of a possible downtrend! Discover all Admirals trading accounts to trade CFDs with!
How to buy or sell Netflix shares
- Login to your MetaTrader 5 trading account
- In the Market Watch tab, right-click
- Go to Symbols and type Netflix in the search bar
- Select the Netflix title and click Show Symbol
- Right-click on the Netflix stock, then click on the New Order button and finally on Buy or Sell
Just follow these 5 quick and easy steps to position yourself in Netflix stock! Invest high with the Invest.MT5 account to buy Netflix shares for cash. You can short Netflix share CFDs with the Trade.MT5 account.
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This is a marketing communication. The content is published for informational purposes only and should not be construed as investment advice or recommendation in any way. It has not been prepared in accordance with legal requirements to promote the independence of investment research and is not subject to any prohibition on trading prior to the dissemination of investment research. Leveraged products (including contracts for differences) are speculative in nature and can lead to gains or losses. Before you start trading, make sure you fully understand the risks involved.
