You can earn a fortune in the stock market. Though it's not common, the best stocks can rise many times in value, helping their investors build tremendous wealth along the way. Netflix (NFLX 2.08%) is one such company.
Back in the days when Blockbuster Video reigned supreme, Netflix co-founders Reed Hastings and Marc Randolph had the wild idea of letting people rent DVDs through the mail. It turned out to be a pretty brilliant concept.
Netflix debuted in 1997. The following year, the fledgling company's new DVD rental site, Netflix.com, went online. And in 1999, Netflix launched what would become a popular DVD-by-mail subscription service.
On May 23, 2002, Netflix's stock began trading on the Nasdaq. Its stock was first sold at an initial public offering (IPO) price of $15 per share. After shedding more than half its value in the months that followed, Netflix's share price would go on to rise sharply, along with its membership metrics. In 2003, Netflix's subscriber base reached 1 million. In 2006, it hit 5 million. Its stock rose multiple times in value along the way.
In 2007, Netflix made the innovative move to offer the ability to stream movies and shows via the internet to its members. Hastings soon realized that streaming represented the future of the entertainment industry and took steps to center Netflix's operations on the game-changing technology.
In 2011, Hastings made the controversial decision to separate Netflix's DVD business from its streaming service. Members voiced their displeasure, and Hastings backed off the move. But he continued to focus Netflix on its streaming future. The move proved prescient -- Netflix's streaming service went on to grow rapidly as it wrestled away subscribers from the traditional cable industry.
In 2016, Netflix's streaming gains accelerated as it expanded into 130 countries. The streaming-star's international expansion initiatives helped its membership base explode to more than 100 million subscribers in 2017.
Today, Netflix's streaming service is available in over 30 languages and 190 countries. Its global membership base now stands at a staggering 195 million people.
Life-changing gains for long-term shareholders
Since its IPO in 2002, Netflix has split its stock twice. The first was a 2-for-1 stock split that occurred in 2004. The second was a 7-for-1 stock split in 2015. Thus, if you had purchased one share of Netflix's stock on the day of its IPO and held it until now, you would have 14 shares today.
If, instead, you had bought $1,000 worth of stock, you would have obtained roughly 66 shares at the time of Netflix's IPO. After Netflix's stock splits, you would own 924 shares. And at the stock's current price of $519 per share, those shares would be worth more than $470,000.
That's not bad for what began as a little DVD rental company.