×
You will be redirected back to your article in seconds

Netflix Stock Hits Record High, Briefly Making It More Valuable Than Disney

Streaming-video giant surpassed Comcast's market cap a day earlier

UPDATED: For a few hours Thursday, Netflix was the world’s most valuable media company, after its stock rallied again Thursday to record highs — pushing the video-streaming leader’s market capitalization past media giant Disney for the first time.

But by the end of the day, Disney’s shares had recovered enough to nudge its market cap back up ahead of Netflix.

Shares of Netflix closed up 1.3% for the day, to $349.29 per share. That gives the company a market cap of $151.8 billion. Year to date, Netflix shares now have increased 82% in value.

Disney’s stock fell 0.8% in trading Thursday, to close at $102.11 per share, yielding a market cap of $152.2 billion.

On Wednesday, Netflix’s market cap surpassed that of Comcast, the cable and media giant that’s poised to start a bidding war with Disney to acquire 21st Century Fox assets. Comcast shares closed down 0.8% on Thursday, giving it a market cap of $145.5 billion.

To be sure, Netflix’s market cap milestone is symbolic — reflecting the seemingly insatiable investor enthusiasm for the company’s growth prospects. In revenue terms, Netflix ($11.7 billion in 2017 revenue) is far smaller than Disney ($55.1 billion for the year ended Sept. 30, 2017) or Comcast ($84.5 billion last year). And it’s worth noting that Netflix remains well below the market caps of its so-called “FAANG” peers: Facebook ($538 billion), Apple ($925 billion), Amazon ($778 billion) and Google/Alphabet ($750 billion).

The run-up in Netflix stock calls to mind CEO Reed Hastings’ warning five years ago about irrational exuberance amid volatile swings in the company’s stock price at the time: “In calendar year 2003 we were the highest performing stock on Nasdaq. We had solid results compounded by momentum-investor-fueled euphoria. Some of the euphoria today feels like 2003,” he wrote in an October 2013 letter to investors.

Defying skeptics, Netflix has continued to sustain a high rate of growth worldwide. It beat expectations for subscriber additions for the first quarter of 2018 both in the U.S. and abroad, to stand at 125 million worldwide.

For Q1, Netflix reported $3.7 billion in revenue, up 40% year over year, and net income of $290 million, up 63%. Significantly, the company kept on growing its sub base despite rate increases in the U.S. and other territories that rolled out widely in Q4 2017.

At the same time, Netflix is burning through tons of cash as it spends an ever-increasing amount on original content for its global audience — and it expects the business to be free-cash-flow negative for the next few years.

The company will spend upwards of $8 billion on content in 2018, with 85% of new spending being poured into original programming, according to chief content officer Ted Sarandos. Netflix expects to have around 1,000 original TV shows, movies, specials and other programming on its service by year-end.

Last month, the company closed a $1.9 billion round of debt financing, its biggest to date, to fuel its content binge-spending.

Pictured above: Netflix chairman and CEO Reed Hastings

More Biz

  • Abigail Disney on Bob Iger

    Abigail Disney Calls Bob Iger's $65 Million Compensation 'Insane'

    Disney chairman-CEO Bob Iger’s total compensation for Disney’s fiscal 2018 was a whopping $65.6 million. Abigail Disney, the granddaughter of Disney co-founder Roy Disney, calls that sum “insane.”  While speaking at the Fast Company Impact Council, the filmmaker and philanthropist insisted that this level of corporate payout has a “corrosive effect on society.” Disney took [...]

  • Contract Placeholder Business WGA ATA Agent

    Signs of Solidarity and Strain Emerge as Week 2 of WGA-Talent Agency Standoff Begins

    Hundreds of WGA members rallied solidly behind their union last week as the industry grappled with uncertainties spurred by the sudden break between writers and their talent agency representatives. But as the standoff heads into its second week, signs of strain among some WGA members are beginning to emerge. Shalom Auslander, author and creator of [...]

  • Woodstock 50 Festival Postpones Ticket On-Sale

    Woodstock 50 Festival Postpones Ticket On-Sale Date

    UPDATED: The troubled Woodstock 50 festival has run into more difficulties, as multiple sources told Variety late Friday that the April 22 on-sale date for the event has been postponed. Agents for artists scheduled to perform at the festival — which include Jay-Z, Dead & Company, Chance the Rapper, Miley Cyrus, Imagine Dragons and Halsey [...]

  • National Enquirer - Jeff Bezos

    Hudson Media CEO James Cohen Purchases the National Enquirer

    Hudson Media’s CEO James Cohen announced Thursday that he will purchase the National Enquirer as well as American Media’s other tabloids, the Globe and the National Examiner. With the purchase of the National Enquirer, which Cohen reportedly bought for $100 million, he plans to strengthen their collaborative efforts, documentary shows, weekly podcasts, and theme parks. [...]

  • Amazon

    Amazon Music’s Free Tier Is More Advertising Play Than Spotify Killer, Analysts Say

    When news began to spread last week that Amazon Music’s long-anticipated free streaming tier was imminent, headlines emerged about its threat to Spotify and Apple Music, with some stories saying that Spotify’s stock price dropped in response to the news. But not only was today’s launch of the free tier basically a soft one — [...]

  • Nicki MinajCFDA Vogue Fashion Fund Dinner,

    Nicki Minaj Parts Ways With Longtime Managers (EXCLUSIVE)

    Nicki Minaj has parted ways with Gee Roberson and Cortez Bryant and Blueprint/ Maverick Management, a source close to the situation confirms to Variety. She had worked with the pair for the majority of her career. The source says the decision was mutual and amicable, and there was no specific reason for the split, adding [...]

More From Our Brands

Access exclusive content