Netflix’s decision to return to the junk bond market with a $2 billion junk bond offering this week, has sparked concerns among the group’s investors that the business is borrowing more than it can afford.
Q3 hedge fund letters, conference, scoops etc
According to the company, the $2 billion in dollar and euro-denominated junk bonds will help it finance its massive spending on original movies and television shows.
But investors are worried that Netflix‘s spending splurge is landing the business with more debt that it can afford, especially as it is hemorrhaging cash.
According to the group’s figures, Netflix will burn through $3 billion in cash this year, and $3 billion in 2019. To finance this spending, long-term debt has risen from $6.5 billion reported at the end of 2017 to $8.3 billion
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