Netflix Adopts Stockholder Rights Plan

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By Trey Thoelcke Published

Netflix Inc. (NASDAQ: NFLX) announced today that its board of directors has adopted a stockholder rights plan. According to the press release:

The Rights Plan is intended to protect Netflix and its stockholders from efforts to obtain control of Netflix that the Board of Directors determines are not in the best interests of Netflix and its stockholders, and to enable all stockholders to realize the long-term value of their investment in Netflix. The Rights Plan is not intended to interfere with any merger, tender or exchange offer or other business combination approved by the Board of Directors.

According to the plan, Netflix is issuing one Right for each current share of common stock outstanding at the close of business on November 2, 2012. These Rights will be exercisable only if someone acquires 10% (or 20% in the case of some institutional investors) or more of Netflix’s common stock in a transaction not approved by Netflix’s board.

If so, each Right entitles its holder to purchase a number of shares of Netflix’s common stock having a then-current market value of twice the exercise price.

The full press release is available here.

Shares are down more than 3% just ahead of the opening bell to $74.40. The 52-week range is $52.81 to $133.43.

Photo of Trey Thoelcke
About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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