By Spencer Jakab

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The stock market's thousand-dollar club was worth every penny. When Netflix split its stock 10-for-one last week, it left that exceptional group-members of the S&P 500 with at least four-digit prices. But its shareholders don't have reason to complain: They've made an almost unbelievable 89,000% return since the streaming star's initial public offering in 2002.

There are now 10 such U.S. stocks remaining, and most have been listed for longer than Netflix. An investor who had divided $10,000 evenly among them in January 2000 (including Netflix) would have a cool $1.5 million today, versus just $73,000 for an S&P 500 index fund.

Even the poorest performer, Berkshire Hathaway's Class A stock, trounced the market. It also happens to be the most richly priced, at three-quarters of a million dollars.

Chief Executive Warren Buffett, seeking to discourage speculation, has refused to split the stock. He issued lower-priced "Baby Berkshire" shares in 1996 to thwart promoters setting up a fund that would have given them fractional ownership. Berkshire then split those lower-priced B shares 50-for-one to aid in a 2010 acquisition-a step that also let it into the S&P 500.

There's no mystery why stocks with four or more digits are top performers-they couldn't have got there otherwise. The real head scratcher is why investors cheer when management decides to split a stock (like Netflix, which beat the market by 2.4 percentage points the day after its announcement).

A split doesn't affect the value of an investor's shares, and brokers offering fractional ownership now make splits unnecessary. But there's a longstanding tendency to bid prices up on the news. Analysts at UBS have said the effect has averaged about two percentage points in the session following a split announcement. There was even a gimmicky split-focused fund that shut down in 2017.

Far more common are reverse splits, which reduce shares outstanding. They predominate because most stocks perform poorly (indexes march higher because of a small number of winners).

Companies fearful of delisting, often "penny stocks," do them to bolster their prices. Of the 239 decisions to change shares outstanding on U.S. exchanges since June, 222 were reverse splits, according to LSEG Refinitiv.

With Netflix's departure, the $1,000 club includes companies like homebuilder NVR, retailer AutoZone, asset manager BlackRock, drugmaker Eli Lilly and online travel agent Booking. Conspicuously absent are the "Magnificent Seven."

Apple, Amazon, Alphabet, Tesla, Nvidia and Microsoft would all be well above $1,000 had they not split over the years. Prices of the first five rose following their most recent announcements.

The need to multiply shares outstanding and a really high price are both signs of an illustrious history. Those qualities might be lasting, but investors should remember the mutual fund boilerplate: Past performance doesn't guarantee future results.

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(END) Dow Jones Newswires

November 25, 2025 08:09 ET (13:09 GMT)

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