Here’s How Netflix, Inc. Shares Jumped 12.5% in May

What happened

Shares of Netflix (NASDAQ: NFLX) gained 12.5% in May 2018, according to data from S&P Global Market Intelligence. In a remarkably quiet month for the headline-magnet streaming video giant, the biggest news was a content production deal with Barack and Michelle Obama.

So what

Netflix’s volatile stock jumped a couple of percent higher at the start of May for no obvious reason. Then things were really, really quiet for a couple of weeks (best read aloud in the voice of Elmer Fudd). Finally, Netflix announced that the Obamas had formed “a storytelling partnership” with the company. Media reports and social media discussions were sharply divided over this idea, but shares soared higher on the news.

Image source: Getty Images.

Now what

Rumors of an Obama partnership of some sort had been bandied around for months, reaching a fever pitch when the former president made a guest appearance on David Letterman’s Netflix talk show. Fans and critics alike wondered whether that appearance might pave the way to a larger deal, where Netflix’s recent appetite for big-ticket content development contracts could make use of Obama’s unique point of view — and supposed oodles of spare time.

Some hard-line conservatives immediately threatened to cancel their Netflix subscriptions over the Obama deal, urging others to do the same. At the same time, Netflix envisions the Obamas being able to reach global audiences with a creative platform based on compassion and optimism. The company has not backed down from this agreement and the overtly political battle lines have been drawn.

We’ll see in the next two quarterly reports whether conservatives followed through with their Netflix boycott. I don’t think so, but stranger things have happened. Meanwhile, Netflix shares continued to reach record highs in early June thanks to a glowing business review by Goldman Sachs.

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Anders Bylund owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.

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