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How to buy Netflix shares?

Financial markets are sources of a multitude of opportunities. The Tech sector is one of the most dynamic engines, especially in the US market which is at the origin of a majority of new consumer trends.

The Netflix Company is an American Success Story. This is the story of a DVD distributor who became the world leader in online streaming in just a few years.

What are the measurable impacts on its results? Is there still time to 'buy Netflix stocks? Our full review on should you invest in Netflix stock?

67% of retail investor accounts lose money when trading CFDs with this provider. You have to ask yourself if you can afford to take the high risk of losing your money.

The history of entertainment giant Netflix dates back to 1997. It was a thriving business at that time that built its foundations on the exploitation and distribution of movies in DVD format through online purchase or rental. The ancestor of dematerialised VOD (Video On Demand) services. The founders of Netflix Reed Hastings and Marc Randolph have masterfully piloted the economic and commercial transition by brilliantly anticipating the future consumption habits of their customers: rental with monthly subscription then streaming without time limit. In recent years, the cinema giant has become financially and artistically involved in a large quantity of cinematographic works (films and series) for its platform but also for the exploitation cinema. 

How has this change in economic model impacted Netflix's share price since its IPO on May 20, 2002 at $17? This retrospective will give us a first glimpse of the real potential to buy Netflix shares.

Following the fall of DVD from favour in the early 2000s, the Netflix company had to face certain difficulties. Despite negative results, its IPO is taking place. Its main objective is to get money into the coffers to finance the transformation of the company. 

Until 2010, Netflix (NFLX) stock never exceeds $10. A first split took place in 2004 (2 shares for 1 owned). The objective is to open the capital to a larger number of shareholders for greater fundraising. The monthly subscription rental service was launched in 2007. Success is somewhat to come, but investors are starting to see changing consumer needs. A first peak was reached in July 2011 with a unit price of around 41 dollars (34.66 euros).

Unfortunately, the benefits are slow to come in and the investments are important. Investors find it difficult to support the development of the future giant. Until the end of the third quarter of 2013, the price of the title fluctuates dangerously by returning to its lowest value (around 10 dollars). Then gradually, the platform, as we know it, is deployed around the world. 

The enthusiasm is immediately at the rendezvous. Results and confidence are positively impacted. The company is entering a bullish phase, which has never really stopped. Between December 2013 and November 2015, the Netflix course progressed in a colossal way. The unit price goes from 53 dollars to 126 dollars (or 106 euros). 

There is resistance around $100 for about a year. Before a dizzying bullish rebound which led the price of Netflix's shares to a new all-time high: 423 dollars (€358) in June 2018. That is to say a jump of 235% in just 3 years.

Volatility is a parameter to consider before buying Netflix stocks, like so many other Silicon Valley tech companies. Between the last quarter of 2018 and the 3rd of 2019, 2 significant drops are noted with a title that goes down to $290.

The COVID-19 pandemic will have been very beneficial for Netflix since since the end of 2019, the Netflix share price has continued to climb. The current price (end of August 2021) is 566 dollars (or 478 euros) per share.

How to invest in a Netflix stock?

Now let's take a look at the methodology for trading online the shares of the multinational, listed on the NASDAQ, specialising in the distribution of entertainment content: films, series and documentaries. 4 steps to follow in our guide to buying Netflix shares:

  • The choice of broker

  • Opening a trading account

  • Deposit of funds

  • Buying NFLX titles

Step 1: Choose a stock broker

trading platform comparison shares on etoro

We have selected 3 very popular brokers among traders to buy Netflix shares: eToro, XTB and Admirals. We will make a presentation of their main characteristics as well as their advantages and disadvantages.

 

The eToro broker is a trading platform known around the world. It is the pioneer of CFD forex brokers with social trading options. That is to say that clients benefit from a social network where they can exchange their best strategies and advice to optimise their orders, as well as copy trading features which consist in replicating the positions opened by more experienced investors with proven performance.

Positive opinions also converge on the issue of very low pricing, in particular on forex trading and spot trading (via an Ordinary Security Account / CTO) thanks to a Zero Commission policy on a wide selection of shares. company and ETF.

The interfaces (web and mobile application) are highly appreciated for their intuitiveness and easy handling. Ideal approach for any newbie trader. The excellent training of the eToro Academy and the free demo account complete this starter pack.

In the short term or in the long term, there are many financial instruments:

  • Forex currency pairs

  • CFD on shares or cash purchase

  • Crypto currencies including Bitcoin

  • ETFs and international stock indices (including the NASDAQ 100)

  • Raw materials

ADVANTAGES

✅     Social trading platform with copy trading

​✅     Extensive catalog of financial instruments

✅     Stock trading in cash (via CTO) or in CFDs with leverage (up to X5)

✅     Competitive forex brokerage fees and share purchase (Zero commission)

DISADVANTAGES

❌     No PEA and its tax advantages

❌     Poor technical analysis tools for professionals

❌     High fees on cryptocurrencies

67% of retail investor accounts lose money when trading CFDs with this provider. You have to ask yourself if you can afford to take the high risk of losing your money.

Step 2: Open a trading account

Now let's establish a general tutorial for opening a trading account:

  1. Go to the home page of the broker's site (or mobile application) and click on the link to open an account

  2. Fill in the data required for registration: last name, first name, email address, country of domicile, telephone

  3. Confirm the email address using the link provided

  4. Complete their profile with the additional data requested and the knowledge form (KYC for Know Your Customer) in order to be informed of the risks associated with trading on the financial markets

  5. Send the required documents to customer service: identity document (CNI or passport) and proof of address (water bill, electricity, telephone less than 3 months old or last tax notice)

Step 3: Deposit funds

When the trader account complies with the general conditions of use, access to the financial area is unlocked. It is essential to deposit real money on your trading wallet in order to buy Netflix (NFLX) shares.

Whatever the chosen broker, this step is rather simple to carry out. The trader goes to the Deposit section. It defines the amount to be transferred. The minimum amount may vary from one broker to another:

  • $200 (or equivalent currency after conversion) at eToro

  • No minimum required with XTB
     

Then comes the choice of the payment method:

  • Credit card

  • Bank transfer

  • Paypal (eToro)

  • Skrill and Neteller digital wallet

  • Other payment solutions: Sofort, Klarna, iDeal, GiroPay, etc.
     

Payments by credit cards, Paypal payments and transfers from a digital wallet allow instant money availability. The processing of bank transfers can take between 1 and 3 days before being able to buy Netflix shares.

Step 4: Buy Netflix shares

All that remains is to buy the Netflix stock market. Here we will take as an example the broker eToro, which is, in our opinion, the best option to consider, especially for novice investors.

The trader goes to the Markets section. He can search for an asset in 2 ways:

  • Manual search by first choosing the stock market then scrolling until you find the Netflix title

  • Direct search by entering the name of the product in the field provided for this purpose
     

The customer selects the Netflix share by double clicking on its title. A new window opens. It's time to enter the transaction criteria:

  • The amount of the order

  • The level of leverage:

    • If the trader maintains the X1, the line is added to the CTO portfolio with the prospect of a long-term capital gain

    • If the trader chooses leverage from X2 (up to X5), this is CFD trading. He can therefore buy or sell the asset depending on how the trend is supposed to evolve after technical analysis.

  • The levels of Stop Loss and Take Profit to secure the position by defining minimum and maximum during that automatically conclude the current position when they are achieved
     

When all the parameters are filled in and comply with the defined investment strategy, the client can buy Netflix shares by validating his order.

Why choose Netflix stock?

What are the legitimate reasons that can prompt us to buy Netflix shares? Its content? Its technology? Its economic model? We're going to go over the main levers that make the Netflix entertainment group great potential.

Let's start with the obvious. The Netflix group is the indisputable pioneer of legal streaming made available to its subscribers. Long before Amazon, Disney + or Apple TV. For 10 years now, the distribution service for classic and original content has been at the forefront of technology.

It is also worth remembering that, despite competition that has landed en masse over the past 2 to 3 years (Amazon Prime Video and Disney + spearheading), the group for the distribution and production of various content and media (films, series, documentaries) knew how to face it without trembling. This leadership position has already been built during a fierce fight against Walmart and Blockbuster in the US market.

The forecasts are all more than positive. The opinions agree with projections of a significant increase in the price of the title at least until the end of the year 2021. The subscribers of the VOD service now number in the millions around the world, with a gradual deployment geographical area by area geographical. The production of original content secures the loyalty of millions of subscribers who have already been won over by the initial service offering. The subscription remains very affordable for full access 24 hours a day, even if it should increase everywhere in the world. This represents additional revenue for the company.

The group's results remained stable in the face of new market players. The growth in the number of subscribers is constant with a forecast of 256 million by 2025, which would make it the largest legal streaming content provider in the industry.

The coronavirus pandemic sped up Netflix's growth due to an explosion in subscriptions as people were forced to stay at home.

Netflix Company Information 

In order to have an overview of the Netflix group and its activity as a producer and distributor of cinematographic content to its subscribers and its investment potential, we have gathered some key information in the summary table below:

netflix trading info

Netflix share dividends

Is there a Netflix dividend? The answer is no.

Like other high growth companies in the Tech sector, Netflix prefers not to distribute dividends to its shareholders in order to consolidate the value of the share over the long term. This strategy allows the media content group to finance, in part, by itself, its technological and commercial development.

It is also an opportunity to have cash available at all times in the event of lower income or a decline in activity. Direct dividend capture increases Netflix's market capitalisation value to almost $251 billion. Over the long term, this contributes to a better valuation of each security present in its wallet.

67% of retail investor accounts lose money when trading CFDs with this provider. You have to ask yourself if you can afford to take the high risk of losing your money.

CONCLUSION: SHOULD YOU BUY A NETFLIX SHARE?

All expert projections tend to validate the idea that buying Netflix (NFLX) stocks is a great investment option. It is a transferable security with high potential, with solid financial health, which must be part of any offensive wallet.

We have mentioned several elements that justify such forecasts. The Netflix company is constantly improving the conditions for broadcasting its content. It tirelessly diversifies its catalog of films and series by purchasing numerous rights. It is also the driving force of its own success since it has been taking on various roles for several years: producer and director of original content. Several fan communities are closely following the next releases. Let's quickly evoke the phenomenon around Strangers Things, La Casa de Papel or The Witcher. Netflix has also embarked on the production and direction of films and animated series to compete with more experienced studios such as Pixar (Disney) or Ghibli (Japanese animation).

Even if the number of subscribers is not quite what the company anticipated in advance, it has still exceeded 200 million worldwide and should continue to grow steadily.

We recommend choosing a reliable and regulated broker, such as eToro, which offers several payment methods (credit card, transfer, paypal, electronic wallet) and investment options with the least possible brokerage fees.