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Banner Week for Netflix Associates — Both Real and Imagined

28 Apr, 2013 By: Erik Gruenwedel

'House of Cards'

Actor Kevin Spacey April 27 reprised his Netflix ‘House of Cards’ role in video spoof for annual White House Correspondents’ Dinner

It was a heady week for Netflix and some well-connected associates.

Actor Kevin Spacey April 27 reprised his starring role as House Majority Whip Francis Underwood from Netflix original political drama “House of Cards” in a video spoof called “House of Nerds” at the 2013 White House Correspondents’ Assoc. Dinner — lampooning the press, Washington politics, Democrats and Republicans alike.

The video was the culmination of a fortuitous week for Netflix, which began April 22 when the rental service surprisingly reported positive financial results with 3 million new subscribers, $1 billion in revenue and a profit — trouncing naysayers and short sellers in the process.

The news sent Netflix shares exploding, with the stock up 125% this year — making the subscription video-on-demand pioneer the best performing stock in the S&P 500 thus far.

The surging valuation made some Netflix millionaires and billionaires even richer.

Jay Hoag, whose Technology Crossover Ventures manages $7.7 billion in funds, April 25 parlayed a $200 million zero coupon (no interest) note in Netflix into more than 2.3 million shares for The Jay Hoag Family Trust at a $86-per-share purchase price. On paper, the transaction generated the Hoag family a gain of more than $285 million dollars.

That ROI is peanuts compared to maverick investor Carl Icahn, who infamously acquired 9.9% of Netflix stock last fall, prompting Netflix’s board to enact a “poison pill” amendment against a possible hostile takeover.

Icahn, who acquired his stake at $56 a share, saw his investment in Netflix approach $1.2 billion, which amounts to a near $900 million return on paper.

Closer to the ground, Leslie Kilgore, who served as Netflix chief marketing officer for 12 years and is now a member of the board, cashed in stock options realizing a $3.1 million return.

Even co-founder and CEO Reed Hastings, who saw his 2012 total compensation drop 40% to “only” $5.5 million, with a base salary below that of chief content officer Ted Sarandos, had reason to smile.

With 4.5% ownership in Netflix stock (largely through options) Hastings’ shares reached $559 million in value last week — up $300 million in less than 12 months.

Finally, Netflix chief talent officer Tawni Cranz proved her worth in recognizing a personal wealth opportunity when she cashed in more than 5,600 stock options generating a return around $834,000.


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