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. For Netflix specifically, the company also wants to make its stock more accessible to employees, given that they all receive options grants and many participate in an options-purchase program.
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. The company’s market cap is currently more than $41 billion. Netflix had previously announced that it was seeking approval from shareholders and its board for a stock split.
Netflix shares have climbed to record highs in the past three months, particularly on investor enthusiasm about the company’s international expansion plans. The company plans to expand its streaming service to some 200 countries by the end of 2016; most recently, Netflix announced that it will launch in Italy, Spain and Portugal in October.
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 had 62.3 million subscribers worldwide as of the end of March, including 20.9 million outside the U.S., after adding a record 4.9 million subs in Q1. The company is scheduled to report second-quarter 2015 earnings on July 15.