How To Buy Netflix (NFLX) Stocks & Shares (2024)

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Quarterly Update, 19 October 2023

• 8.8m subscribers added in Q3 2023, compared with 2.4m for same period last year

• Global subscriber base of 247m, up from 238m

• Q3 revenue up 7.8% year-on-year at $8.54bn

• Q3 net income $1.68bn compared with $1.49bn in previous quarter

• Q3 earnings per share $3.73 compared with $3.10 a year earlier

• Monthly subscription for Basic up £1 to £7.99, Premium up £2 to £17.99.

Netflix is one of the world’s largest entertainment services companies. The business, headquartered in California, offers streamed broadcasts as one of its key selling points.

It has more than 247 million customers in almost 200 countries paying for television series, documentaries, feature films and mobile games across a wide variety of genres and languages.

Members can play, pause and resume watching content as much as they want, anytime, anywhere. Netflix offers several different tiers of pricing so that consumers can select a plan that best fits their circ*mstances and needs.

In 2022, the company proposed a revival of its business model and launched a discounted subscription service featuring adverts for the first time.

Later that year, in December, the company released ‘Harry & Meghan’ a highly-publicised docu-series charting the lives of the Duke and duch*ess of Sussex – from the time of their courtship to their acrimonious departure from the UK royal family.

Here’s what you need to know about buying – and selling – Netflix shares.

Why own stocks?

It’s worth asking yourself why you want to buy shares. Are you looking for capital growth, income from dividends, or a combination of both? Your investment objective will determine what type of shares you invest in, whether high-growth technology shares, or more defensive companies with a reliable income dividend stream.

Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products and services with future growth potential. These should provide a solid platform for future share price growth.

That said, other factors such as takeover rumours can drive up a company’s share price. Investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.

There are several steps to take once you’ve satisfied yourself about the reasons for buying shares in a particular company.

1 – Open an account

Whether you’re a seasoned share trader, or someone who is brand new to stock market-based investments, if you want to buy shares in Netflix, you’ll need to open an account with a regulated brokerage.

Stockbroking services for DIY investors come in a range of guises – from online investing platforms to investment trading apps that work off your smartphone or tablet.

Before opening an account:

• keep your ultimate financial goals in mind
• be prepared to ride out stock market ups and downs
• aim to keep trading costs to a minimum
• remember that share investing can prompt tax charges, for example, when selling stock.

Before buying any shares ask yourself:

• should I take financial advice?
• am I comfortable with the level of risk?
• what’s my budget?
• can I afford to lose money?
• do I understand the company in which I’m looking to invest?
• am I protected if my platform provider/adviser goes out of business?

2 – Know where Netflix is traded

The ticker symbol for Netflix is NFLX. The company is traded on the Nasdaq in the US. Nasdaq’s trading hours are 2.30pm – 9pm (UK time) Monday to Friday.

You should be able to buy US shares through most brokerage accounts. Buying shares in US dollars incurs a foreign exchange fee (typically around 1%) unless you fund the purchase from a US dollar account.

Most brokerages also charge a slightly higher transaction fee for buying US, rather than UK, shares although it’s worth comparing the fees charged by different brokers if you plan to trade US shares regularly.

You will be asked to complete a W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%. Holding US shares also carries exposure to foreign exchange risk. If the pound strengthens against the dollar, your shares will be worth less in sterling (and vice versa).

As with UK shares, any profit on US shares will be subject to Capital Gains Tax (CGT), unless you hold the shares in an Individual Savings Account (ISA) or Self-Invested Personal Pension (SIPP).

3 – Do your research

To find out more about Netflix, go online and visit the company’s investor relations page.

4 – Decide your investment strategy

People tend to invest either with a lump sum purchase, or via smaller amounts over time.

The latter method is often referred to as a means of ‘pound cost averaging’, a stock market hack which may help you pay less per share on average over time. Rather than waiting to build up a lump sum, it means an investor’s money is being put to use in the market straightaway.

5 – Place an order

Once you’re ready to buy shares in Netflix, log in to your investing account or trading app. Type in the ticker symbol NFLX and the number of shares you want to buy, or the amount of money you’re prepared to invest.

6 – Review performance

Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital you review how each component is performing on a regular basis: monthly, quarterly, or annually.

Doing this gives you the opportunity to review performance and ask if any adjustments to your holdings are required – to maintain the status quo, buy more stock, or sell existing shares.

How to sell Netflix stock

When you want to sell your holdings, log in to your investing platform, type in the ticker symbol and select the amount you want to sell.

If you’ve made a substantial profit, you may be liable to CGT when you come to sell your holdings, especially if your shares were held outside a tax-exempt wrapper such as an ISA.

The CGT tax-free allowance for the tax year 2023-24 is £6,000, a significant reduction from a figure of £12,300 in the previous tax year. Note that the allowance is due to be lowered again, to £3,000, in 2024-25. Find out more here about CGT, rates and allowances.

How to invest in Netflix via a fund

Investing directly in individual stocks will, hopefully, be a profitable experience. It may also qualify you for shareholder perks specific to the company in question.

It can also leave you vulnerable to stock market volatility and unforeseen swings in share prices. Nowadays, even a solo tweet – let alone a full-blown geo-political conflict – can send shock waves through the stock market.

That’s why, financial experts recommend that most people invest in a diversified mix of asset classes and investment funds that hold hundreds, if not thousands, of company shares.

Being a large component of the Nasdaq index, Netflix is found in many ‘active’ and ‘passive’ (index tracker) funds incorporating a bias towards the US.

Frequently Asked Questions

Does Netflix pay a dividend?

Can I buy Netflix shares with a debit card?

Yes, in the sense that you’d need to add funds using an appointed card to an existing online investing service or trading app before making the share trade from there.

What does it cost to trade Netflix shares?

This will vary depending on the investment service/platform that an investor is using to trade.

Broadly speaking, there are three main types of fee. First is a share trading fee that investors are charged by a platform each time they buy or sell shares. Note that some platforms charge no fee for this activity, while others may charge a flat fee of typically between £6 and £12.

Second comes the platform fee which is typically levied as an annual fee charged for holding shares on a particular investing platform. Again, some providers impose no fee, others charge a flat fee, and some services charge a percentage, typically 0.25% to 0.45% per annum of the value of an underlying portfolio.

If you buy or sell shares denominated in a foreign currency, such as dollars as relating to Netflix, nearly all of the investing platforms charge a foreign exchange fee. Again, this will vary amongst providers, but tends to sit in a range from 0.5% to 1.5% per transaction.