Chip Stock Investor Podcast The Real Reason ServiceNow & Netflix Are Splitting Stock (It's Not What You Think)
Nov 3, 2025
ServiceNow and Netflix are set for major stock splits in late 2025, with ServiceNow opting for a 5-for-1 split and Netflix going for a 10-for-1. The hosts explore the surprising motivations behind these decisions, primarily linked to employee stock compensation strategies. They highlight that while stock splits can boost market perception, the real indicators for investors should be Free Cash Flow per Share and sustainable growth. Plus, they discuss the historical tendency of stocks to rise post-split.
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ServiceNow Growth And Split Rationale
- ServiceNow is a workflow automation SaaS growing near 20% with AI additions and a notable NVIDIA supplier/customer relationship.
- Management announced a 5-for-1 split to simplify employee stock awards and keep share price near sub-$200 levels post-split.
Track Repurchases And Shares Outstanding
- Monitor company repurchase behavior to see if management offsets dilution from stock-based compensation.
- Use tools like Fiscal.ai during earnings season to track shares outstanding and per-share trends.
Netflix Split Tied To Growth And Compensation
- Netflix announced a 10-for-1 split to lower per-share price from over $1,000 to just above $100 and ease employee equity grants.
- The split follows record revenues driven by global expansion and ad-supported tiers, implying continued mid-teens revenue growth.