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Netflix, Inc. Message Board

  • jack_augh jack_augh Mar 14, 2013 12:01 PM Flag

    Secondary or Debt?

    By my calculation NFLX has a $3.5 million deficit of cash every day. The debt offering earlier this year netted them $200 million (the rest going to pay back an earlier debt offering). Well that only lasts 57 days...they need to make a move soon. So what will it be to meet the this years remaining shortfall of $1.2 billion?

    I hope Hastings is smart enough to issue stock at this price, as a debt offering of this magnitude might lead to downgrades as well as analysts questioning the model of selling services for less than costs, while rewarding senior management over paying for content. We don't want this to end!

    As I see it, Reed would only need to issue 6.7 million shares at a price of $180 to get thru the year. He can wait until next year to issue more to cover the cash expense needed in 2014. This will change the current amount of shares outstanding to about 63 million and raise the market value by $1.2 billion. Its a win / win.

    More shares, higher market value, continue to lock in content at extremely high prices...this will go to the moon! Buy Buy Buy!

    Sentiment: Strong Buy

 
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