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Netflix Hopes to Raise $1 Billion to Finance Corporate Endeavors

Fern Siegel

Netflix has seen its global subscribers skyrocket to 183 million in the first quarter, while its stock price hit an all-time high. But it still plans to offer $1 billion in senior notes to raise funds, per Deadline.

The monies will be used “for general corporate purposes, which may include content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions,” Netflix said.

The financial push isn’t a surprise; Netflix spends billions on content each year, which tallied $15 billion in 2019. The streamer, however, differs from its traditional TV rivals, since it doesn’t depend on advertising or live sports.

The subscription service offers three tiers – basis, standard and premium — and has benefited greatly from stay-at-home orders.

The market’s overall concern is Netflix’s long-term debt and negative cash flow. Long-term debt stood at $14.17 billion in the first quarter. However, Netflix CFO Spencer Neumann assured investors after releasing the first quarter earnings report that the pandemic shutdowns had reduced negative free cash flow from an estimated $2.5 billion this year.

Once production restarts, so will negative free cash flow.

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