Reed Hastings' $20 million Netflix buy
Netflix's co-founder bought the dip in January 2022. The dip kept going for months before his bet paid off.
- Insider
- Reed Hastings
- Role
- Co-CEO & Chairman
- Bought
- Jan 27–28, 2022
- Shares
- 51,440
- Avg. price
- $388.83
- Total
- $20.0M
The setup
Netflix missed its fourth-quarter revenue and subscriber forecasts on January 20, 2022. A week later the shares were trading near $380, down 35.7% for the year and far below their 52-week high of $700.99.
On January 27 and 28, Hastings bought 51,440 shares through a family trust at an average of $388.83, about $20 million.
What happened next
- Hastings buys 51,440 shares at an average of $388.83.
- Netflix reports its first subscriber loss since 2011, 200,000 members. Shares close at $226.19, down 35% in a day.−42% vs. his price
- Shares close at $290.00, still 58% lower than a year earlier.−25% vs. his price
- After strong fourth-quarter 2023 results, shares trade near $553.+42% vs. his price
Prices as reported at the time, before any later stock split.
What InsiderBeacon would have flagged
A founder and co-CEO buying $20 million after a sharp fall would have topped the feed and alerted anyone following Hastings or NFLX. The score can't tell you how the next earnings report will land. See how the score works.
The takeaway
Insiders know their business, not how the market will react next quarter. Hastings' buy said the shares looked cheap, and they got 42% cheaper before it paid off. Following him in meant sitting through that drop first.
Sources
- Netflix CEO Hastings buys $20M of shares in the dip, TipRanks, January 31, 2022
- Netflix shares plunge 35% after massive subscriber loss, BNN Bloomberg, April 20, 2022
- Hollywood stocks take big hits in 2022, The Hollywood Reporter, December 2022
- Netflix stock soars 13% after Wall Street boosts price targets on strong Q4 results, TheWrap, January 24, 2024
This case study is for education, not investment advice. Past insider purchases don't predict future returns. We chose these cases because their filings and outcomes are well documented, and we include losses on purpose.