Netflix stock hits all-time high after price hike for US subscribers

Reed HastingsKevork Djansezian/Getty ImagesNetflix CEO Reed Hastings.

Netflix shares reached a record high on Thursday, following the company’s decision to raise its prices for US subscribers.

Netflix stock closed at $US194.39 per share on Thursday, up 5.4% for the day.

The figure is an all-time high, according to Variety.

Netflix raised the price of its most popular “standard plan” service to $US10.99 a month from $US9.99.

Its highest-tier plan, which supports 4K video resolution and four simultaneous streams, will increase to $US13.99 a month from $US11.99.

The company’s lowest-tier plan will not change from its current price of $US7.99 per month.

The stock surge suggests investors are confident the price increase won’t cause big subscriber losses, as Netflix has continued to improve the quality of its content offering over the last year, and has therefore boosted its pricing power.

RBC analysts have estimated that Netflix’s price hike will boost
its revenue by about $US650 million in 2018.

The price increase comes as Netflix continues to spend more money on content. The company will spend close to $US7 billion next year, according to its content boss, Ted Sarandos.

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