Netflix Invests $2 Billion in New Content

Streaming giant Netflix is reportedly planning to raise $2 billion for producing and procuring new original shows and movies for its service. The money will be raised by selling off part of Netflix’s current long-term debt of $8.34 billion to a currently undecided debt security. Netflix has been racking up quite a hefty debt recently, with the current standing nearly double what it was at last year, approximately $4.89 billion. Netflix’s shares fell 3% on Monday morning, though it managed to recover to 0.9% by the end of the market day.

Analysts speculate this new debt is due to the upcoming release of Disney’s unnamed streaming service and Netflix’s desire to be ahead of the game before it even starts. Despite its financial snafu, Netflix is doing fairly well, with 7 million new subscribers to the service obtained for 2018’s third quarter. In a letter to shareholders on October 16th, Netflix made this statement: “We recognize we are making huge cash investments in content, and we want to assure our investors that we have the same high confidence in the underlying economics as our cash investments in the past. These investments we see as very likely to help us to keep our revenue and operating profits growing for a very long time ahead.”

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5 years ago
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