Question of the Day (Update): If you invested $1,000 in Netflix stock ten years ago, what would it be worth now?
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?
Here are the ready-to-use slides for this Question of the Day
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
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.
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