Netflix Still Has a Big Appetite for Debt
Just a few days after setting a massive new record for quarterly operating income, Netflix (NASDAQ: NFLX) plans to tap the debt market once again to fund its content budget. The streaming leader aims to raise another $2 billion in U.S. dollars and euros just six months after its last $2 billion bond issue. The move underlines the expectation Netflix will burn $3.5 billion in cash this year, and negative cash flow will remain elevated for the foreseeable future even as it starts to trend back toward breakeven next year.
Netflix ended the third quarter with $12.4 billion in long-term debt and $4.4 billion in cash and equivalents. But with big competitors entering the market and weak domestic subscriber growth, Netflix needs to keep investing in original content to maintain its position well ahead of the pack.
Image source: Netflix.
Source Fool.com
