Netflix (NASDAQ: NFLX) has been back in the news recently with its bid to acquire the majority of Warner Bros. Discovery’s assets. Although there’s a way to go until that massive deal closes (or falls apart), it represents a new direction for the streaming king.
Netflix has done this several times before — pivoting into an adjacent business and pioneering new media directions. And if you had invested $500 in its stock 10 years ago, back when it was a different operation, the shares you bought would be worth a lot more today.
Netflix, as most readers will know, began as a DVD-by-mail rental service, but it segued into streaming as the technological foundation required to support such services developed. It started offering streaming video subscriptions in 2007, and created its first original content in 2012. By 2015, Netflix was already a household name with a fast-growing business, and smart investors could have easily seen its potential.
If you had invested $500 in late 2015 and held on through the ups and downs that followed, your stake would be worth $3,869 today. That’s a 674% gain. For reference, the S&P 500 had a total return of 301% over that decade.
Could Netflix do that again over the next 10 years? It’s unlikely. Netflix is no longer the young and comparatively small company it was 10 years ago. However, it has demonstrated time and time again that it can dictate trends and change the media scene, and it should be able to keep growing. It could still be a strong addition to a well-rounded investment portfolio.
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