Who Owns Netflix: The Largest Shareholders Overview

Article Teaser: Who Owns Netflix: The Largest Shareholders Overview

Netflix, Inc. (NFLX) is a subscription-based streaming service and production company. Netflix makes money by providing its own and third-party content to its customers for a monthly fee. Let’s look at who owns Netflix and who controls the company.

The largest shareholder of Netflix is Vanguard, an asset manager, which owns an 8% ownership stake, followed by BlackRock (7%) and Capital Group (6%). A notable shareholder is also co-founder and co-CEO Reed Hastings, who owns 1% of Netflix.

 Netflix's Largest Shareholders (Dec 2021)
Shareholder Ownership Voting Power
Vanguard 7.6% 7.6%
BlackRock 6.6% 6.6%
Capital Group 5.8% 5.8%
Reed Hastings 1.2% 1.2%
Other 78.9% 78.9%
Listed are shareholders holding >5% of any share class or notable in other ways
   Source: Multiple SEC fillings

Netflix largest shareholders by share ownership and vote control (donut chart) Netflix largest shareholders by share ownership and vote control (donut chart)

Vanguard and BlackRock are the two largest shareholders of Netflix. It is hardly a surprise since those are the two largest asset managers worldwide and are often the top two shareholders in larger public companies.

More interesting is the third largest shareholder, Capital Group.

  • Capital Group has a significantly smaller asset under management than giants Vanguard and BlackRock.
  • Despite that, they have a significant Netflix position, which means that their funds under management are far more heavily concentrated in Netflix shares.

Netflix was founded in 1997 by Reed Hastings and Marc Randolph.

Reed Hastings’s stake in Netflix after its IPO in 1997 was 15%, which through the years, decreased to the current ownership stake of 1%. Even this decreased ownership stake makes Hasting the largest known individual shareholder.

  • Netflix co-founder Reed Hasting is still actively involved in the company and serves as company co-CEO and board chairman.

Co-founder Marc Randolph is no longer actively involved in Netflix, and probably sold most of his stake after he left the company in 2002, shortly after Netflix’s IPO.

  • His stake in Netflix after IPO was 5.5%, including some options.

In this article, I will dive more into who Netflix’s largest shareholders are, how many shares and votes they have, and how much their stake is worth. I will also explore some other topics related to its ownership structure.

If you are interested, you can also explore who owns other companies like Amazon, Twitter, Apple, or Roblox.

🕹️ Who Owns Netflix (NFLX) and Who Has Control?

The chart below depicts both who owns Netflix and the voting power of different shareholders. Since Netflix does not have any special classes of shares, and all shares have just one vote, you can see that ownership share equals voting power.

Netflix largest shareholders share ownership vs vote control chart

Netflix has only one class of shares, so there are no super-voting shares in the hands of founders. One share gives its holder one vote.

Netflix ownership is quite disbursed among different asset managers, which are Netflix’s biggest shareholders. None of them controls the company individually. However, the top three shareholders together have significant blocking power.

Above mentioned blocking power results from several rules in Netflix’s bylaws that make it difficult to easily replace the board, and as a result it makes it difficult to pursue a hostile takeover of the company.

  • 2/3 majority is required to elect directors
  • Netflix has a classified board system where directors are split into three groups (classes), and in each ear, only one group is up for reelection for a three-year term.
  • No director can be removed without cause. End even if it is for case, confirmation is needed from 2/3 majority of shareholders.
  • A 2/3 majority is also required to change the rules around board elections.
  • A similar classified board system is used, for example, by Tesla for its board.

Reed Hasting has only a small percentage share, but since he is the chairman of the board and co-CEO, he has outsize influence over Netflix.

🗳️ Breakdown of Netflix’s Outstanding Shares and Votes by Top Shareholders

Netflix, Inc. had a total of 444 million outstanding shares as of December 2021. The following table shows how many shares each Netflix’s large shareholder holds.

 Netflix's Outstanding Shares by Shareholder
In millions of shares as of December 2021
Shareholder Class A Total % Share
Vanguard 34 34 7.6%
BlackRock 29 29 6.6%
Capital Group 26 26 5.8%
Reed Hastings 5 5 1.2%
Other 350 350 78.9%
Total (# millions) 444 444 100.0%
Listed are shareholders holding >5% of any share class or notable in other ways
   Source: Multiple SEC fillings

There were 444 million votes distributed among shareholders of Netflix, Inc.. The table below shows the total number of votes for each large shareholder.

 Netflix's Vote Control by Shareholder
In millions of votes as of December 2021
Shareholder Class A Total % Share
Vanguard 34 34 7.6%
BlackRock 29 29 6.6%
Capital Group 26 26 5.8%
Reed Hastings 5 5 1.2%
Other 350 350 78.9%
Total (# millions) 444 444 100.0%
Listed are shareholders holding >5% of any share class or notable in other ways
   Source: Multiple SEC fillings

You can see that there is no difference between shares and votes, since Netflix has only a single class of shares.

💵 Breakdown of Netflix’s Market Value by Shareholder

The following table summarizes how much is each shareholder’s stake in Netflix, Inc. worth.

However, keep in mind that a stake in Netflix could be just one part of their portfolio, and their total worth could be bigger, thanks to other investments. It could also be lower if they have debts.

 Netflix's Market Value by Shareholder
Market value in billions $ as of December 2021
Shareholder Class A Total % Share
Vanguard $20 $20 7.6%
BlackRock $18 $18 6.6%
Capital Group $16 $16 5.8%
Reed Hastings $3 $3 1.2%
Other $211 $211 78.9%
Total ($ billions) $267 $267 100.0%
Listed are shareholders holding >5% of any share class or notable in other ways
   Source: Multiple SEC fillings

Let’s now look at each Netflix shareholder individually.

📒 Who Are the Largest Shareholders of Netflix, Inc.

Let’s now go through the list of the largest shareholders of Netflix, Inc. one by one and look at who they are, how many shares they own, what is their voting power, and how much is their stake in Netflix worth.

#1 Vanguard

Vanguard holds 8% of Netflix’s shares making it its largest shareholder.

Netflix largest shareholders share ownership vs vote control chart

Vanguard owns 34 million Netflix shares, representing 34 million shareholder votes. The market value of Vanguard’s stake in Netflix was $20 billion as of December 2021.

Vanguard (The Vanguard Group) is one of the largest asset managers in the world. It manages other people’s money through its mutual funds and exchange-traded funds and also offers other related investing and financial planning services.

Vanguard differs from other large asset managers by having no actual “owner .” Officially Vanguard says that its investors own it since its funds own it, and Vanguard fund investors own those funds.

However, the actual decision power is in the hands of Vanguard’s insiders since the ownership is diluted over millions of investors worldwide.

Vanguard has significant influence over the largest public companies. Thanks to its size, Vanguard usually belongs to the largest shareholders in those companies and has considerable power at their shareholder meetings. This is especially true if ownership is diluted.

Vanguard representatives make the calls about which shareholder proposal to support or not, even though Vanguard is not the ultimate owner of those stocks and they belong to their clients.

It means that just a few people in charge of the largest asset managers have significant sway over many publicly traded companies. They are usually the median investors that can push or kill many proposals. As passive investing became more popular and the asset management market more concentrated, this became quite a concerning issue.

  • Several terms were coined to describe this issue. Some call it asset manager capitalism, and popular is also the power of twelve. Financial Times even put together who exactly those twelve people might be.

  • Vanguard and other large fund managers are trying to address those concerns by having public policies describing how they are exercising their voting power. But as you can imagine, this is still a situation full of conflicts of interest.
  • Evidence shows that big asset managers usually vote together with management.

#2 BlackRock

BlackRock holds 7% of Netflix’s shares which makes it its second-largest shareholder.

Netflix largest shareholders share ownership vs vote control chart

BlackRock owns 29 million Netflix shares, representing 29 million shareholder votes. The market value of BlackRock’s stake in Netflix was $18 billion as of December 2021.

BlackRock, Inc. is the world’s largest asset manager, with assets under management of $10 trillion. BlackRock is not only an asset manager, but it also provides other asset managers and corporations with its Aladdin portfolio management software.

BlackRock is a publicly traded company, and its largest shareholders are its competitors, including BlackRock itself. Not directly but through their passive and active funds. The largest shareholder is Vanguard.

A similar situation is also true in the opposite direction because BlackRock is a significant shareholder in many of its publicly traded competitors and other large institutions, making the whole thing even more eyebrow-raising.

This circular ownership between Vanguard, BlackRock, and other large asset managers, amplifies the issue often raised about the power of these large asset managers over public companies since they usually belong to the most significant shareholders.

  • BlackRock and other large asset managers do not invest their own money, but they have significant voting power that, in most cases, is not passed through to the underlying investors. Therefore, BlackRock itself and its representatives have significant sway over decisions in those companies.

  • In the case of Blackrock, this influence is personified in the form of its CEO Larry Fink, who is a powerful figure with close ties in the FED and US government.

  • Adding to these concerns is evidence that BlackRock and other asset managers usually vote in favor of management proposals.

  • Recently, large asset managers started to be more sympathetic to different climate and environmental-related proposals and even supported activists that went against the management’s wishes. BlackRock was particularly aggressive in this change. Another proof of the power these companies have.

#3 Capital Group

Capital Group holds 6% of Netflix’s shares which makes it its third-largest shareholder.

Netflix largest shareholders share ownership vs vote control chart

Capital Group owns 26 million Netflix shares, representing 26 million shareholder votes. The market value of Capital Group’s stake in Netflix was $16 billion as of December 2021.

Capital Group is one of the larger investment management companies. It does not invest its own capital but the capital it manages for other people and institutions.

Capital Group tout is differentiated approach to investment management. For example, they use multiple managers in one fund who cooperate but have discretion over their sub-portfolio.

#4 Reed Hastings

Reed Hastings holds 1% of Netflix’s shares.

Netflix largest shareholders share ownership vs vote control chart

Reed Hastings owns 5 million Netflix shares, representing 5 million shareholder votes. The market value of Reed Hastings’s stake in Netflix was $3 billion as of December 2021.

Reed Hasting is co-founder of Netflix and its current con-CEO and board chairmen.

He studied computer science at Standford and, after that, worked as a software engineer.

He founded Pure Software, his first startup, in 1991. Pure Software was later acquired multiple times. Hasting cashed out in 1997 to fund his next startup, Netflix.

Netflix was founded in 1997 by Hastings and Marc Randolph, and Hastings is still actively involved in the company.

❔ Does Netflix Co-founder Marc Randolph Still Own Netflix?

Reed Hastings and Marc Randolph co-founded Netflix in 1997, and while Reed Hasting’s face is closely connected with Netflix as its current co-CEO and former CEO, only a few people know who Marc Randolph is.

Marc Randolph is Netflix’s co-founder and also its first CEO. However, he later passed the CEO reins to Hastings in 1999 and turned to product development.

Marc Randolph was still working at Netflix when it went public in 2002, and his official title was “Vice President of New Markets.”

He left soon after the IPO, and based on his memoirs, he has likely sold most of the 4% stake he held after the IPO soon after he left.

❔ Who Founded Netflix, And What Were Their Original Stakes?

Netflix was founded in 1997 by Reed Hastings and Marc Randolph and launched in 1998.

Netflix’s original business model was subscription based mail-order DVD rental. It was unique at the time that for a monthly subscription, customers could borrow a DVD for as long as they liked without late fees.

  • After the customer mailed it back, they would receive the next DVD by mail from the list the customer put together.

Netflix was also very innovative in the way that its machine learning-based recommendation engine nudged people to which DVDs to borrow next.

At the time of its initial public offering (IPO), Netflix was still a DVD-rental business, although innovative.

In 2007, Netflix introduced streaming, and it very slowly gained dominance.

Now, Netflix still operates a DVD-rental service in the US, but it constitutes less than 1% of its revenue. Its main business, however, is subscription-based streaming of movies and TV shows, including the production of its own content.

Netflix founders’ ownership stakes at the time of the IPO were as follows:

  • Reed Hastings had a 20.0% ownership stake before the IPO, diluted to 14.8% after, including options.
  • Marc Randolph had a 5.5 % ownership stake, diluted to 4% after, including options.

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Other Resources

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