## Stock Split Rumors Heat Up: Will Costco and Netflix Answer the Call?

The stock market has been riding high on two major waves: artificial intelligence innovation and the tantalizing prospect of forward stock splits. Among Wall Street's most anticipated scenarios is whether blue-chip names like **Costco Wholesale** and **Netflix** will join the 2025 stock split wave. Yet despite circulating **stock split rumors** about these mega-cap players, the reality beneath the surface tells a far more complicated story.

## The Split Split Between Theory and Practice

A forward stock split is deceptively simple—it adjusts a company's share price and outstanding shares proportionally while leaving the business's fundamental value completely unchanged. Yet investors have consistently demonstrated they love this cosmetic adjustment. According to **Bank of America Global Research**, companies announcing forward splits averaged 25.4% returns over 12 months post-announcement, substantially outpacing the S&P 500's 11.9% average return over the same historical period since 1980.

This performance gap has created a feedback loop: investors actively hunt for the next stock-split announcement, while high-share-price companies face mounting speculation about whether they'll execute one. The stock split rumors swirling around **Costco Wholesale** (trading near $1,000) and **Netflix** (hovering around $1,300) reflect this dynamic perfectly.

## Why Costco Isn't Taking the Bait

On paper, Costco appears to be the ideal candidate. The warehouse giant hasn't conducted a forward split since January 2000—a 25-year drought. Yet when Melius Research analyst Karen Short posed the question during Costco's December fiscal Q1 conference call, CFO Gary Millerchip offered a candid response: the economic rationale for splitting no longer applies.

The culprit? Fractional-share purchasing. Decades ago, stock splits mattered because retail investors couldn't afford high-priced shares. Today, brokerage platforms have democratized access. Costco's leadership team recognizes that fractional shares have neutralized the primary argument for splitting, even while acknowledging the psychological appeal of a lower nominal price. Without board-level conviction that everyday investors face genuine barriers, the likelihood of a Costco split announcement remains minimal.

## Netflix's Institutional Problem

Netflix faces an entirely different headwind—one rooted in shareholder composition rather than market infrastructure. Retail investors, who typically champion forward splits because they benefit from lower nominal prices, represent only 19.8% of Netflix's outstanding share base. Institutional investors and brokerage entities account for the overwhelming 80.2% majority.

This concentration matters profoundly. Hedge funds, passive index funds, and custodial banks managing billions or trillions in assets have zero need for lower nominal share prices. They purchase Netflix stock as easily at $1,300 as at $650. Without a critical mass of retail advocacy, Netflix's board has little incentive to orchestrate a split announcement—a reality that mirrors companies like **AutoZone**, **FICO**, and **Booking Holdings**, which maintain even lower retail ownership levels around 10-11% and remain split-resistant despite sky-high valuations.

## The Verdict on Stock Split Rumors

The stock split rumors circulating about these two giants reflect investor enthusiasm rather than imminent board action. Costco's fractional-share reality and Netflix's institutional domination create structural barriers that high share prices alone cannot overcome. While neither company can be completely ruled out—particularly Netflix, whose ~20% retail ownership isn't historically unprecedented—Wall Street's stock split euphoria may need to look elsewhere for its 2025 headliners.