Netflix stocks jump after subscription price increase

Netflix shares reached a record high on Thursday, following the company's decision to raise its prices for US subscribers. Netflix stock closed at $194.39 per share on Thursday, up 5.4% for the day.

Netflix raised the price of its most popular "standard plan" service to $10.99 a month from $9.99. Its highest-tier plan, which supports 4K video resolution and four simultaneous streams, will increase to $13.99 a month from $11.99.

The company's lowest-tier plan will not change from its current price of $7.99 per month.

One of Netflix’s most popular originals ever, Stranger Things, will be returning for a highly anticipated second season later this month, which could be why now is the perfect time to announce the increase. With a new focus on original content, Netflix has even mentioned that they’re open to the idea of theatrical releases for some of their films, in addition to making them available for streaming.

The majority of analysts that have appraised Netflix’s worth have also acknowledged there will be a decline in the subscriber base, but they are anticipating it to have a minimal impact on new growth. Those numbers are projected for about 176 million subscribers by 2020. Dough Mitchelson, a UBS analyst, noted that analyst confidence in Netflix is under the presumption that the company would not make such bold moves if its numbers were on a downward trend. Netflix stock closed at its highest yet, $194.39, and the company is projected to reach $225 per share within 12 months.