Netflix (NASDAQ:NFLX) recently made headlines with its offer to acquire the majority of Discovery of Warner Bros.the assets. While there’s a ways to go until this massive deal goes through (or falls apart), it represents a new direction for the streaming king.
Netflix has done this many times before – pivoting to an adjacent business and paving the way for new media. And if you had invested $500 in its stock 10 years ago, back when it was another deal, the shares you bought would be worth a lot more today.
Netflix, as most readers know, began as a DVD-by-mail rental service, but later evolved into streaming as the technological base required to support such services grew. It began offering streaming video subscriptions in 2007 and created its first original content in 2012. By 2015, Netflix was already a household name with a rapidly 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. This represents a gain of 674%. For reference, the S&P500 had a total return of 301% during this decade.
Could Netflix do it again in the next 10 years? It’s unlikely. Netflix is ​​no longer the young and relatively small company it was 10 years ago. However, it has demonstrated time and time again that it can set trends and change the media scene, and it must be able to continue to grow. This could still be an important addition to a well-balanced investment portfolio.
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