Netflix's 10-for-1 Split: Don't Fall for the Hype

Alright, so Netflix is doing a 10-for-1 stock split. Big deal. Are we really supposed to believe this suddenly makes them a "better" company? Please.

The Illusion of Affordability

Management claims it's about making the stock "more accessible" to smaller investors. Oh, how generous of them. Like they actually care about your measly $50. Let's be real, it's about juicing the stock price, creating a little buzz, and hoping the FOMO crowd jumps in.

It's like taking a dollar and giving you back ten dimes. You still have a dollar. The market cap doesn't magically change, people. This is basic stuff. Why do they treat us like we're idiots?

And the history of stock splits? Doesn't exactly scream "guaranteed riches." One article says buying high-priced stocks right after a split yields an average return of 17.4% compared to 9.8% for the S&P 500. Sounds great, right? Except... only 43% of those stocks actually beat the market over the next year. It's all smoke and mirrors.

Another article points out that stocks priced above $400 underperform in the short term after a split. See, Buying Netflix 10-for-1 Stock Split? Expect Underperformance. So, what's the play here? Buy the hype, then watch your investment tank for a few months? No thanks.

The Fundamentals: Are They Even There?

Okay, let's ditch the split nonsense and look at the actual company. Netflix's third-quarter earnings were "respectable," apparently. Sales jumped 17.2% year-over-year. They had some boxing match that broke records. Cool.

They keep pushing this "globalized business model" with potential in India and other developing countries. Sure, there's potential. But potential ain't profit. How much are they actually making in these markets? And how much are they spending to create "localized content"?

Then there's the ad-supported tier. Management expects it to "double this year." Great. But double what? They don't even disclose how much it's generating. Classic corporate BS.

The real kicker? Valuation. The stock has a forward P/E of 37. That's "pricey," according to some sources. You think? Nvidia, the darling of AI, trades at a lower P/E, and they're actually growing like crazy. Netflix grew net income by 8% last quarter. Eight percent! For that kind of growth, you're paying a premium for the name, not the performance.

I mean, is it really worth it? The streaming landscape is a warzone. Disney, Amazon, Apple – they're all fighting for eyeballs. Netflix might be the OG, but they ain't invincible.

And don't even get me started on the password-sharing crackdown. Yeah, it boosted subscriptions, but at what cost? Alienating loyal customers? Creating a user experience that feels like a constant surveillance state? They expect us to believe this nonsense, and honestly...

Netflix's overall stock score is "Neutral" according to some AI analyst. Can't say I disagree.

The Spark of Doubt

Then again, maybe I'm being too harsh. Maybe this stock split will bring in a new wave of investors who don't know any better and drive the price up. Maybe Netflix will conquer the Indian market and become the undisputed king of streaming. Maybe pigs will fly.

This Split Smells Like Desperation