Insider Selling, Stock Options and Stock BuybacksNetflix spent a good portion of 2010 and 2011 buying back stock. It spent millions repurchasing shares at prices in excess of its post-implosion market price. The whole buyback scheme was curious. Netflix never said much about the practice; the company just claimed it was making best use of free cash flow. Some folks question the sense of a growth company buying back stock. Others wondered if Netflix was repurchasing shares to offset the impact of dilution caused by the exercise of massive amounts of stock options. On his own, CEO Reed Hastings regularly cashed out around a $1.5 million in Netflix stock per pop, alongside aggressive selling by other insiders and the company's employee program. Netflix provided the classic case of a company destroying shareholder value, when it fundraised $400 million toward the end of 2011.
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