Netflix's New $2 Billion in Borrowing Raises Wall Street Eyebrows
The streamer's long-term debt has soared north of $10 billion, though Moody's says ratings and outlook remain stable.
Netflix's insatiable appetite for content, both original and licensed, is causing the giant streamer to borrow another $2 billion, and Wall Street has mixed emotions on the matter.
While Monday's disclosure of additional debt didn't immediately knock the stock down, several hours later shares had given back the day's gains and ended by trading down 1 percent.
Longtime skeptic Michael Pachter of Wedbush Securities says the additional debt did not come as a surprise, considering Netflix's penchant for reporting negative cash flow. "It is precisely what we modeled," says Pachter. "So long as they burn cash, they will have to raise capital to fund their content spending."
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