Netflix sets major stock buyback worth $25 billion amid stock price lag

Netflix has put in place a massive $25 billion stock buyback program, as the streaming giant seeks to combat or capitalize on a falling stock price and Wall Street’s concerns over disappointing financial guidance.

The company unveiled the stock buyback program on Thursday morning. The new program will be in addition to the 2024 buyback program, which still has $6.8 billion available. The company had paused its stock buybacks as it sought to acquire Warner Bros., but told Wall Street earlier this month that it intended to resume the program.

But earnings appear to have been the driving force in the new and significantly higher stock buyback program. The company’s stock price lagged after its latest earnings report as investors expressed concerns about the company’s guidance, even after it raised prices last month, and the stock has never fully recovered from its pursuit of Warner Bros.’

Netflix received a $2.8 billion breakup fee when it chose not to match Paramount’s deal for the company, although investor concerns appear to be focused more on forward-looking issues. The stock buyback is intended to mitigate this and send a message that Netflix executives and its board of directors view the stock as undervalued.

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