Perhaps that new narrative will be the complete toppling of pay-TV with a Netflix-centered bundle of streaming services. As we talked about in the letter, we're committed to improve our cash flow profile meaningfully, starting in 2020 and then each year thereafter."Īs Netflix's days of cash burn are behind it, it's possible Netflix may need a new Wall Street narrative to convince investors its future growth story is worthy of the company's lofty valuation. "We intend to be a much larger and much more profitable self-funding company over time," Hastings said during Netflix's 2019 first-quarter earnings conference call. While operating a sustainable business without the need for outside debt and share buybacks is "Business 101," Netflix's stock has risen as investors have increasingly come to the conclusion that Netflix would make good on that promise. ![]() The unknown question is how investors will respond to the change in Netflix's narrative. And that's when investors will get spooked." If Netflix needs to raise capital, they'll issue stock. "What happens when they need to keep increasing their spending and suddenly they have $10 billion of debt? People are going to start asking, 'can this company pay us back?' If that happens, their lending rate will spike. "Netflix has burned more cash every year since 2013," Pachter told CNBC in June 2018. Over the years, Netflix skeptics, such as Wedbush analyst Michael Pachter, have pointed out that Netflix's increasing debt load should be concerning for investors as content spending ballooned and the company burned more cash. The company said it plans to pay back its outstanding debt that matures in 2021 with its more than $8 billion of cash on hand. ![]() ![]() Since 2011, Netflix has raised $15 billion in debt to help pay for this content. It has spent billions of dollars on licensed and original content each year to boost its catalog, and along the way morphed into a replacement product for traditional pay-TV in millions of households. Personal Loans for 670 Credit Score or Lowerįor the past 10 years, Netflix has upended the media industry by taking a leap of faith. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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