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Netflix to Sell $ 2 Billion in Bonds as It Supports Competitive Pressures



This story has been updated; a previous version mistakenly identified the company that would download Friends and Office from Netflix.

Bloomberg News / Landov

Netflix Inc. plans to raise another $ 2 billion in debt as it moves to win the funding needed for new content as the battle for streaming customers is heated by slate offers.

Netflix

NFLX, + 1

.00%

stated that it plans to issue junk-denominated bonds denominated in dollars and euros. He did not specify the dates but said he would use the proceeds for a number of purposes, including content, production and development and potential acquisitions.

The company faces highly competitive proposals from rivals with Walt Disney Co.'s deep pockets.

DIS, -0.48%

and Apple Inc.

AAPL, + 1.73%

to launch in November. Disney-plus is priced at just $ 6.99 a month, compared to $ 8.99 a fee for Netflix for its core plan, and will include its entire library of movies and TV shows, including the Marvel and Star Wars franchises. Comcast Corp. & # 39; s

CMCSA, + 1.12%

NBCUniversal will download some of its existing content from Netflix after its license agreements, including Friends and Office, have expired, and have become popular with millennial audiences.

See: Martin Scorsese says about cinema, streaming is "an even bigger revolution than sound"

Also: Netflix shares are jumping – but not all analysts subscribe to hype

Apple The TV + offer is priced at $ 4.99 per month and will be free for one year with the purchase of a new Apple device. So far, the content table looks thin compared to Netflix, but the iPhone maker is expected to grow through acquisition.

See it now: As Netflix's profit platform comes in, competition is coming – and content

These services will be followed by offers from Peacock's service from Comcast and AT&T Inc.

T, -0,62%

HBO Max is coming in the spring of 2020. Netflix is ​​already competing with services from Amazon.com

AMZN, + 1.60%

and Hulu.

Just last week, Netflix acknowledged that on-going competition could hurt new subscribers' growth. The company said it expects subscriber growth to decline year by year in the typically strong fourth quarter and year-round, even with a strong list of new shows.

"The launch of these new services will be noisy," Netflix executives say in a quarterly letter to shareholders. "There may be some modest progress toward our near-term growth, and we have tried to point it at our direction."

For more, read: Netflix finally acknowledges the obvious: Apple's competition and Disney will harm

Netflix primarily finances its acquisition and production by issuing unwanted bonds, putting its long-term debt at about $ 12.5 billion. The company's most active bonds – 5.875%, maturing in November 2028, were last quoted at a yield of 271 basis points over comparable cashiers, according to MarketAxess's bond trading platform.

See Also: AMC Theaters Launches Streaming Service In Netflix's Last Blow 0.7 Monday, and gained 3.6% in 2019 while the S&P 500

SPX, + 0.69%

has accumulated about 20% and the Dow Jones Industrial Average

DJIA, + 0.21%

has accumulated 15%.

See it now: Netflix thinks Fortnite is a bigger competitor than other streaming services


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