10K80 by Claude J. Easy April 24, 2018
Netflix this and Netflix that. On Monday, the American entertainment company priced a $1.9 billion junk-bond offering so you know where the takeover is at.
For those of you who don’t know what a junk-bond offering is, let me explain. What Netflix has done is acquire more debt in order to fund more original content in hopes of a massive takeover in the near future.
This is not the first time Netflix has turned to debt financing. In fact, the massive content streaming platform prefers junk bond offerings over selling equity through stocks. This will mark the fifth time Netflix is raising more than $1 billion in debt offerings according to Variety.
In a statement to shareholders on April 16 regarding why the company decided to take on more debt, Netflix said,
“We believe the debt is a lower cost of capital compared to equity…”
True, but to average joes, isn’t taking on more debt a bad thing? Not when you’re Netflix and as a company has already raked in $3.1 billion in Q1 of 2018. Plus with the company’s subscribers increasing every quarter who needs to worry about credit.
Imagine Biggie dubbing Netflix because they wanted more credit. He for sure wouldn’t dead it.
Besides debt investors on Wall Street drooling over Netflix, Hollywood is also predicting that Netflix will take over the land of show business. Which is actually not a far-fetched idea. According to the LA Times, Netflix was exploring the idea of purchasing Mark Cuban’s LA Landmark Theatres.
The only reason why Netflix theatres aren’t being built yet is that the Los Gatos, CA company backed out of the deals because the asking price was too high.
But trust when they do find the right numbers, Netflix will drop the guap and invest. This is so they can have more of a competitive edge when it comes to eligibility for prestigious awards like the Oscars.
Not to mention Netflix is on track to be worth more than Disney. Yes, Disney the master of all things entertainment. On Monday, Netflix’s value was estimated to be at $138.3 billion versus Disney’s $150.6 billion.
Damn Walt is turning in his cryonic chamber over a company that only fell $12.3 billion short, of his massive entertainment company’s worth. That’s probably why Disney is getting into streaming.
Lest not forget Netflix is the same company that killed BlockBuster and Hollywood Video. Plus the prediction Netflix CEO, Reed Hastings, made back in 2009 whilst being interviewed by the NYT proves that what the company devotes their time to accomplishing reaps massive rewards. Hastings said,
“There is a revolution happening, and within two years I think that Wi-Fi and Netflix will be built into all the televisions.”
In other words, you better up your game up Disney. Mickey Mouse ain’t shit anymore.