The issue of investment is more relevant now than ever before. If investing used to be the prerogative of only large investors, now, thanks to modern Internet technology, anyone with Internet access and the minimum amount for an initial investment can try his or her hand at the stock market. It does not matter whether you live in the centre of a big city, which is a recognised financial centre, or in the most remote area of a small province, if you want to learn the basics of the science of exchange: the possibilities of an online platform are the same.

Our brief overview is about the possibility of investing in Netflix shares in New Zealand.

Netflix is an American media service provider and production company based in Los Gatos, California. The company was founded in 1997 by Reed Hastings and Mark Randolph in Scotts Valley, California. The company's core area of business is the provision of prepaid network broadcasting services for the library of movies and television shows (including those created by Netflix itself). 

As of April 2020, Netflix has 182 million subscribers worldwide, including 69 million in the United States. Netflix is available in all countries and regions except mainland China (due to local restrictions), Iran, Syria, North Korea and the Autonomous Republic of Crimea (due to US sanctions). The company also has offices in Brazil, the Netherlands, India, Japan and South Korea. Netflix is a member of the American Association of Motion Picture Companies (AAC). The company also produces and distributes content worldwide.

Netflix's revenue in the fourth quarter rose 21.5% year-on-year to $63.64 billion, however, net income fell 7.6% to $542 million.

For the first quarter of this year, Netflix forecasts revenue growth of 23.6% year-on-year (to $7.1 billion). Regarding net earnings, the company expects a growth of $1.66 billion.

Netflix is therefore attractive in investment terms.

Information about the Netflix shares on the platform
Information about the Netflix shares on the platform

How to invest in Netflix shares in New Zealand?  

Netflix Inc. for the development of its business previously attracted actively and in significant amounts borrowed funds. This has led to the fact that today the issuer has a large amount of liabilities on its balance sheet. The high debt burden, which requires the payment of interest and principal, does not allow Netflix to pay dividends to shareholders in cash. According to analysts, free financial resources, including profits, the company directs to the development of its business. In the process of producing new content, paying for additional content and diversifying into 190 countries, the company has raised billions of dollars in loans: $21.9 billion as of September 2017 (compared to $16.8 billion a year earlier). Of this amount, $6.5 billion are long-term loans, the rest are long-term bonds. In October 2018, Netflix announced another $2 billion loan to fund new content.

Starting in 2015, it ceased paying cash dividends and the company reimbursed its investors for these payments in securities, further increasing share issuance.

Last year, however, the picture could improve significantly.

The number of new paid Netflix subscribers globally for all of 2020 increased by 31% to 37 million, up from 28 million in 2019. According to a Netflix press release, the EMEA (Europe, Middle East and Africa) region accounted for 41% of new paid subscribers for the year, APAC (Asia Pacific) was the second largest source of growth at 9.3 million per year (65% growth over last year).

According to Netflix forecasts, earnings for Q1 2021 will be $7.13 billion (projected growth of 23.6% compared to Q1 2020), and earnings per share will grow 90% to $2.97, while the quarterly amount earnings will be $1.36 billion (almost double the previous year). Analysts predict Netflix's first-quarter earnings of $2.10 on revenue of $7.02 billion.

How to buy Netflix shares?
How to buy Netflix shares?

Netflix plans to add 6 million new subscribers worldwide this quarter, indicating a slowdown in growth in additions.

Netflix has stated that after years of negative cash flow and borrowing money to fund its operations, it will no longer need to borrow money. In Q4, Netflix posted negative free cash flow (FCF) of $284 million, but FCF for all of 2020 was positive $1.9 billion compared to negative $3.3 billion in 2019.

Until Netflix has officially resumed dividend payments, the most popular method of investment is CFDs, so-called contracts for difference.

A contract for difference is a financial instrument that allows the seller and the buyer to settle without paying for the underlying asset, paying each other the difference between the value specified in the contract and the actual price. The basic assets in the case of a contract for difference are mainly futures, equities, precious metals, stock index and others. You can earn both in the fall and in the growth of the market. The main task of the investor in this case is to predict fluctuations in the prices of the underlying asset. That is, based on the tools available to him for analysis, he must assume where the price will be after some time.

CFD (contract for difference) on shares allows you to use leverage, you can get an interesting return on investments, even with a small capital. However, it should be noted that trading with borrowed funds is associated with a higher level of risk and is not suitable for all investors.

Netflix Equity Trading Platform
Netflix Equity Trading Platform

Netflix shares in New Zealand can only be traded through a broker that allows transactions with assets listed on the NASDAQ trading platform.

Find information about the existence of such brokers in New Zealand.

When choosing a broker, make sure that it meets the following requirements:

  • whether the broker is licensed by recognised regulatory bodies, which entitle it to engage in brokerage activities;
  • availability of a professional website with all necessary information;
  • availability of feedback for consultations;
  • trading conditions available with a wide range of trading instruments;
  • availability of technical indicators for the analysis of share price fluctuations;
  • access to free training materials;
  • speed of execution of requests;
  • low service fees;
  • availability of convenient methods for account replenishment and withdrawal.

Once you have chosen a broker, register on their online trading platform and start trading.

How to buy Netflix shares in New Zealand?  

To start working with shares online, you need to register on the online investment platform. This is a very simple and standard procedure, which is no different from registering on any other site. All you need to do is enter standard information about yourself, such as your surname, first name and email address. The system will ask you to confirm the email through an automatic link in the letter. After confirming the email, your profile is activated.

Registrating on the investing platform
Registrating on the investing platform

A free demo account will be available to you first. A demo account is a training test account, which the system automatically replenishes for a certain amount of fictitious funds. 

A demo account is an exact copy of a real account, with its help you can perform exactly the same operations as with a real account. Only in the case of a demo account, you do not spend real money, but trade with fictitious money. This practice helps you to see which mistakes you are making, which functions are better to use and which are not. You do not need to risk real money. You cannot withdraw money from the demo account.

How to open an account?
How to open an account?

To start trading for real, top up your real account. Generally, trading platforms designed for the average trader set low initial amounts for the initial payment and rarely exceed $10. Highly professional trading platforms, designed for large investors, may set a significantly higher initial amount to replenish.

It is easy to replenish your account. To do this, click on the "top-up deposit" button and select one of the top-up options offered by the system: by bank card or by the payment system. Funds are credited with up to five banking days.

You can withdraw funds from the account in the same way as the top-up was made.

Deposit replenishment
Deposit replenishment

Is it reasonable to invest in Netflix shares in New Zealand? 

We should not forget that, despite the apparent simplicity of trading and the availability of online investment, trading is a science that requires at least a basic understanding of how the stock market works, an understanding of certain patterns and processes, and requires constant training and deepening. knowledge.

The online trading platform contains a "training" section, where you will find a lot of useful information and even video tutorials to help you quickly understand the principles of trading. Also use external sources of information to learn.

Remember that stock price fluctuations are also affected by a number of external factors, including political processes at home and around the world, domestic economic laws and macroeconomic market processes, as well as phenomena such as man-made and natural disasters.

Monitor the activities of the company in which you invest. Follow the direction of its activities, analyse whether the product or service provided by the company will be demanded by consumers in the future.

If you persistently study such processes, follow market trends, the behaviour of certain companies, you will eventually learn to analyse and forecast possible growth or decline in the value of the company's assets. This will enable you to make successful investments in the investment market and grow professionally as an investor.

Analysts give comforting forecasts for Netflix investments. The past year has been a great success for the world-famous streaming service.

We believe that investing in Netflix shares in New Zealand is a great option.

We wish you successful trades and high returns!

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