Hastings Nets $33M from Option Sale as Netflix P/E Drops to 28x
NFLX•Reed Hastings exercised 386,700 options at a $10.26 strike and sold them at $86 average, netting $33.2M after a $38M sale last month, while retaining 21.16M shares ahead of his board departure. Shares are down 31% year-on-year, re-rating from 100x to 28x P/E while retail chatter rose 64%.
1. Inside Sale and Board Exit
Reed Hastings exercised 386,700 non-qualified options granted in 2016 at a $10.26 strike price and sold them at weighted average prices of $85.85 and $86.73, generating $33.2 million in proceeds. This follows a $37.96 million sale of 407,550 shares last month, and Hastings will step down from Netflix’s board this month while retaining 21.16 million shares.
2. Valuation Re-rating and Performance
Netflix’s stock has declined over 31% in the past 12 months as the market adjusted its valuation from above 100x trailing P/E to about 28x. Investor focus has shifted from subscriber growth to monetizing its 300+ million subscriber base through advertising, margin expansion and price increases.
3. Retail Reaction and Trading Impact
Retail chatter around Netflix on social platforms surged by 64%, with some traders labeling the sale routine and others expressing caution. Shares reversed course in overnight trading, rising 0.2% after a 2.94% drop to close at $83.33 in the prior session.
