Netflix officially announced its plan today to raise $1 billion in debt to fund a range of initiatives, including “content acquisitions” and “potential acquisitions.”
The company did not give an official date for the debt offering, or the terms. But the size of the debt is testament to just how competitive the market for video-streaming services is becoming, and what Netflix believes it needs to do to stay on top.
While the company intends to keep expanding internationally, it is also finding that striking deals for content is becoming more costly. In addition, the company is creating a growing roster of original content to attract subscribers and compete against the likes of HBO.
“Netflix intends to use the net proceeds from this offering for general corporate purposes, which may include content acquisitions, capital expenditures, investments, working capital, and potential acquisitions and strategic transactions,” the company said in a press release.
The company disclosed its intentions to raise debt last week when it announced its earnings, and subsequently in its annual report. In the earnings call, executives said they believed that with interest rates remaining low, it was a good time to secure a large amount of debt on favorable terms.
With more than 25 million members in the United States, Canada and Latin America, Netflix, Inc. [Nasdaq: NFLX] is the world's leading Internet subscription service for enjoying movies and TV... All Netflix news »