Question of the Day (Update): If you invested $1,000 in Netflix stock ten years ago, what would it be worth now?

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Jun 02, 2020
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Question of the Day, Investing

Answer: NFLX: $71,765.89! (as of 5/29/20)

Remember when subscribing to Netflix meant watching the mailbox for DVDs? 

Netflix shares have been prone to large gains and losses as it has grown into a dominant media company. But like Apple, Netflix wasn’t exactly the company it is today 10 years ago. In May of 2008, Netflix was primarily a mail-order DVD rental company that had just rolled out a streaming service that was capped at 10 hours of free viewing a month for the base membership.

If you predicted that streaming was the wave of the future — like CEO Reed Hastings did — every $1,000 you invested in Netflix would be worth over $70,000 today.

Yahoo! Finance provides 10 year results for a number of well-known stocks (to view the rest click here): 

 

Netflix (NFLX): $71,765.89! (as of 5/29/20)
Share price June 1, 2009: $5.63
Share price May 29, 2020: $419.73
Compound annual growth rate: 47.51%

 

Questions for your students

  • Do you think the increase in value was steady over time?  Why or why not?
  • What competitive or technological innovations may have disrupted and then accelerated Netflix’s growth?
  • Do you think as an investor it would have been easy to buy Netflix stock 10 years ago and hold it over this time period? Explain your answer.
  • Who do you think are Netflix’s competitors today?

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Here are the ready-to-use slides for this Question of the Day

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Check out one of NGPF's most popular investing projects in which students track the long-term performance of stocks they select: 5 Stocks on Your Birthday

About the Author

Mason Butts

After graduating from UCLA with a Master's in Education, Mason spent 5 years as a science educator in a South Los Angeles public high school. He is committed to supporting the holistic growth of all students and empowering them to live a life of relational, academic, and financial success. Now settled in the Bay Area, Mason enjoys facilitating professional developments and partnering with educators as they prepare students for a bright financial future. When Mason is not building curriculum or planning a training, he can be found cycling, trying new foods, and exploring the outdoors.