In 2005, if you’d purchased 100 shares of Netflix— remember that company that delivered DVD movies to your mailbox?—it would have cost you a little over $11,000.
Not an insubstantial investment—stock analysts already liked the Netflix model, and investors had already priced a lot of future growth in—so Netflix wasn’t a cheap stock back in 2005. At a little over a hundred bucks a share, and a purchase minimum of 100 share blocks, you might have thought twice before executing that trade.
But say you had. What would that 100 share block of Netflix stock be worth today?
Well, at a 10% rate of return for 10 years, your $11,000 or so would be worth about $28,500.00.00. Not bad. Add in the fact that the Great Recession was in session for a few of those years, and you might feel even better. But Netflix did better than that. How good?
There’s an old stock market joke that goes something like this:
Q: What should I do if my broker promises me a 20% return?
But let’s just, for sake of speculation, see what a 20% average annual return on your Netflix investment would have yielded: a little over $68,000. You’ll note that double the return rate more than doubles the performance of your money—that’s the power of compounding over time. Keep that in mind as we continue to examine Netflix’ performance.
Because in fact, your $11,000 or so investment in 100 shares of Netflix did quite a bit better than even 20% average annual returns.
100 shares of Netflix purchased in the middle of 2005 would be worth over $475,000.00—almost half a million dollars, and represents an average annual return of about 46%…
So what was the big change?
Well, mostly the Netflix business model is now based upon streaming content. In short, Netflix has data/content people want (movies) aggregated together in the cloud (their servers) and accessible to their subscribers on demand. It has literally transformed their business, and made millionaire after millionaire from investors who believed in the power of doing this.
At 5iSolutions, Inc. we believe in the power of data available upon demand. But rather than harnessing the power of entertainment, we help your business harness the power of information that is important to you, and your customers. Data secured in our Cloud Vault, organized the way you need it. Available from anywhere, anytime, served on-demand– just like your favorite movie. And this service will create big profits—for you.
5i Solutions, Inc. One single, secure point of intake, access, and storage. One singular solution.
Learn more at http://5iSolutionsInc.com