Netflix to Borrow Another $1 Billion With Cash at Record High

(Bloomberg) -- Netflix Inc. is selling new junk bonds, even as the company sits on a record high cash balance and turned its first quarter of positive cash flow in six years.The streaming giant is looking to borrow $1 billion to fund content acquisitions and production, among other general corporate purposes, according to a statement Wednesday. It’s coming off of its best quarter yet for subscriber growth, as people who are house-bound during the coronavirus pandemic spend more time watching streaming services, contributing to the success of hits like “Tiger King” and “Love Is Blind.”The bond offering comes as Netflix’s stock and bonds have surged in recent weeks, as one of the rare companies to benefit from the global shutdown. With production largely on hold, Netflix generated positive free cash flow of $162 million, the first time it hasn’t been negative since 2014. It also has $5.2 billion of cash, a record high balance.While Netflix has traditionally sold bonds after its first quarter earnings in April, it’s looking to reduce its need to tap public markets for additional funding by becoming sustainably profitable. Analysts said ahead of the company’s results that it didn’t need to raise more money, but could take advantage of cheap borrowing costs to boost liquidity even further.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P. Read More...

(Bloomberg) — Netflix Inc. is selling new junk bonds, even as the company sits on a record high cash balance and turned its first quarter of positive cash flow in six years.

The streaming giant is looking to borrow $1 billion to fund content acquisitions and production, among other general corporate purposes, according to a statement Wednesday. It’s coming off of its best quarter yet for subscriber growth, as people who are house-bound during the coronavirus pandemic spend more time watching streaming services, contributing to the success of hits like “Tiger King” and “Love Is Blind.”

The bond offering comes as Netflix’s stock and bonds have surged in recent weeks, as one of the rare companies to benefit from the global shutdown. With production largely on hold, Netflix generated positive free cash flow of $162 million, the first time it hasn’t been negative since 2014. It also has $5.2 billion of cash, a record high balance.

While Netflix has traditionally sold bonds after its first quarter earnings in April, it’s looking to reduce its need to tap public markets for additional funding by becoming sustainably profitable. Analysts said ahead of the company’s results that it didn’t need to raise more money, but could take advantage of cheap borrowing costs to boost liquidity even further.

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