So in the early 2000s, hardly anybody heard of Netflix. They were some mail-in company you got videos from when you were too lazy to go to the video store. But now, it’s an IT service entertainment monster, worth around $100 billion. However, there still seems to be financial issues. Is Netflix in debt? This is hard to believe.
So according to their own statement, Netflix will raise $1.5 billion in ‘offering senior notes’. The statement is in such legalese and corporate jargon that I won’t even try to interpret it. But in their statement, they will use this new debt to increase their business. By that, I mean better production of shows, make better investments and making better strategies.
All these changes sound exciting to Netflix leaders, but their stock holders…not so much. As of this writing, Netflix stocks are down around 10 points. That’s about three percent. Like I said, their statement is legalistic. However, most think it will use this new debt to invest in new programs. They did this in previous years. Over the years, they raised billions to produce new shows of their own, depending less on other networks and studios. Are these new shows worth the new debt? That’s up to each person to decide for themselves.
Is Netflix in debt? Maybe the title is a little misleading. What they’re doing is creating debt to build better programming. This IT support entertainment firm came a long way from shipping DVD’s. Also, from the stats I’m reading, this is a move Netflix can afford. As of April 2018, Netflix has over 125 million worldwide. In fact, in Q1 2018 alone, they got over 7 million new subscribers. This trend has no signs of slowing down. So maybe this new debt is good debt, if there is a such thing. C’mon…admit it. How many times do you use the phrase, “Netflix and chill”?