Netflix seeks $1 billion loan to fund new shows
Streaming service giant Netflix Inc (NFLX.O) will raise a $1 billion debt on Thursday to fund original shows and potential acquisitions. The American media-services provider and production company revealed that they have more than doubled its own projections for new customers and admitted that it was all because of the virus outbreak.
The company’s shares were down by 3% and priced at $420 in morning trade. It also predicted weaker sales in July once the lockdowns are lifted.
Some film releases and U.S. studio productions were paused due to the pandemic.
According to Chief Content Officer Ted Sarandos, Netflix already started working on more than 200 programming projects for 2020 and 2021.
Netflix was determined to produce original content for its 183 Million global subscribers as more streaming media services become popular in the United States such as Walt Disney Co’s (DIS.N) Disney+, Apple Inc.’s (AAPL) Apple TV+, HBO GO, and other upcoming rivals.
Analysts from Piper Sandler wrote in a client note, “Despite new services on the horizon from HBO and launches of services from Disney and Apple, we expect minimal long-term impact to Netflix subscriber addition and retention.”
The company raised a $15 billion cash budget last October 2019. It is selling a $2 billion offering of senior notes this time.