First, is the economic view. On May 29th, 2002 the IPO was $15 per share, ending the first day at $16.75. By February 2004, Netflix was selling at over $70 per share. Unfortunately, the stock sputtered for the next 4 plus years and was trading at less than $19 per share in November 2008. In 2009, there was steady growth, followed by extreme growth in 2010 and early 2011. Late 2011 and 2012 had no growth at all. 2013 to 2015 was up and down. At times in 2014 the share value went from as low as $314.21 to as high as $484.39. By the end of 2015 Netflix shares were trading as high as $126.60. In early 2016 the shares dropped to $82.79. Currently Netflix stands at $265.32 per share. This number is down from the $418.65 in July 2018. If you invested $1,000 at the stocks first day closing price, it would be worth $300,000 today.
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Next is the social or charity work. Netflix CEO Reed Hastings launched a new $100 million charity called the Hastings Fund, which will focus on kids’ education as he has been a big proponent of the education system as he served on the California Board of Education for 4 years. He has given millions to build charter schools and invested millions more in developing education software to personalize learning. Reed Hastings and his wife joined the Giving Pledge which was created by Warren Buffet and Bill and Melinda Gates.
Next up is nature. Currently, it is said that Netflix is harming the environment. For the past several years Netflix has been looking to reduce their environmental impact particularly in the area of electricity use. Netflix’s plan is to minimize their electricity use, use renewable energy, and continuing to report on their progress. As a new initiative to reduce its carbon footprint, Netflix uses wind power to offset its energy for cloud storage. Netflix has joined the EPA’s Green Power Partnership program, a voluntary program where businesses commit to use green power for some or all of their annual electricity consumption. As a part of this program, the company submits an annual report on the total electricity use and investment in renewables.
Lastly, is the political outlook for the company. CEO Reed Hastings has put up big money towards different props in California. He put a quarter of a million towards Prop 47, a measure that would continue recent efforts at criminal justice reform. He has spent over $8.5 million on California politics from 2001-2011. As of 2014, Hastings and his wife have donated over $400,000 to federal politics. He has donated to Democratic party leadership groups like the Democratic Senatorial Campaign Committee around the highly contested 2008 elections. He gave a small donation of $5,000 to the 2012 reelection campaign of Barack Obama and helped bankroll the NJ senatorial campaign for Cory Booker. In 2012, the company spent over $1 million lobbying policymakers on issues like telecommunications and privacy. Hastings has been an outspoken critic of President Trump which has caused a negative view towards Netflix amongst Republicans.
Netflix has its own Political Action Committee or PAC called FLIXPAC. They formed it in 2012 as another way to boost their Washington profile. The committee can make donations directly to federal candidates, up to $5,000 per election. The PAC provides Netflix with another political tool to aggressively press a pro-intellectual property, anti-video piracy agenda. This is an effort it began in earnest in 2010, when the company began heavily investing in federal lobbying efforts. In 2009, for example, Netflix spent just $20,000 on federal lobbying, congressional records show. But that figure grew to $130,000 in 2010 and $500,000 in 2011, as legislative debates over the Stop Online Piracy Act, Protect IP Act and Video Privacy Protection Act raged. In 2012, the company reported using the services of nearly two-dozen registered lobbyists, including in-house advocates and those from three lobbying firms: Franklin Square Group, Monument Policy Group and Kountoupes Consulting.
In the most recent 2018 midterm elections, Reed Hastings has spent $571,600 of his own money, 100% towards the Democratic Party. As of the end of September 2018, Netflix employees had contributed $190,592 to Democrats for the midterms, compared with just $1,350 to Republicans. This is not out of the norm for tech company employees. Texas Instruments is the only company out of the top fifteen tech companies whose employees favored Republicans but that was by a slim margin.
Overall Environmental Analysis of Netflix. (2022, Sep 01).
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