Netflix Adds to Growing Debt Pile with $2B Bond Issue

Netflix Inc (NFLX.O) announced on Monday it will tap debt markets for a second time this year, aiming to raise another $2 billion as the streaming video pioneer invests heavily in the production of original shows and content acquisition to fend off intensifying competition. The move, which the company said was aimed at funding a broad spread of activities including paying for new content, spurred falls in both the prices of its bonds and its shares as investors worried about the growing costs of its huge planned investments in years to come. Netflix Chief Executive Reed Hastings has been explicit about the Los Gatos, California-based company’s plan to fund the content acquisition by raising debt. “We’ll continue to finance our capital needs in the high-yield market,” Hastings wrote in his second-quarter shareholder letter. The move was very well telegraphed by Netflix, said John McClain, portfolio manager at Diamond Hill Capital, which is long in the debt, adding the debt raise “makes sense to us.” Netflix has said it plans to spend $8 billion on content this year. The company had already spent $6.9 billion on TV shows and movies by the end of its third quarter, suggesting that if they continue apace, their 2018 spending is likely to be closer to $9 billion.

Spotlight

Other News

Dom Nicastro | April 03, 2020

Read More

Dom Nicastro | April 03, 2020

Read More

Dom Nicastro | April 03, 2020

Read More

Dom Nicastro | April 03, 2020

Read More