Netflix to raise $2B to fund new content
Netflix plans to raise an additional $2 billion from debt markets to fund original content as it looks to lure additional subscribers, the streaming giant disclosed on Monday.
The Los Gatos, California-based company said the $2 billion debt offering would be issued in dollars and euros. Netflix disclosed a total debt load of $11.83 billion in a Sept. 30 filing, according to Reuters.
Netflix shares fell more than 2 percent in early-hours trading after the announcement.
“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,” Netflix said in a recent letter to shareholders. “These investments we see as very likely to help us to keep our revenue and operating profits growing for a very long time ahead.”
Facing rising competition in the streaming space from rivals such as Amazon and Hulu, Netflix has relied on a hefty slate of original programming to differentiate its product and lure new subscribers. The company is expected to spend as much as $13 billion this year on original programming, The Economist reported.
Netflix shares surged last week after the company easily surpassed Wall Street’s projections for its subscriber growth in the third quarter. The overall paid subscriber base increased by 6.96 million users, more than one million of which are based in the U.S.
