$400 million will help cover content costs
Netflix announced a pair of deals late Monday that will provide an infusion of $400 million in capital, punctuating a day that brought its stock to new lows.Netflix shareholder Technology Crossover Ventures bought $200 million in convertible debt. The deal grants TCV zero-coupon notes due in 2018. In addition, Netflix is selling 2.86 million in common stock to the mutual funds and accounts operated by T. Rowe Price Associates. The selloff is worth $200 million at the public offering price of $70 per share. Netflix stocked dropped as low as $73.26 on Monday, its lowest level since March 2010. It dropped an additional 6% in after-hours trading. The cash infusion should help Netflix afford its rising content costs, which are projected to reach $3.3 billion next year by the company’s own estimation. The latest addition to those costs was a deal Netflix announced last Friday with 20th Century Fox TV and Imagine Television to produce new episodes of the defunct Fox series “Arrested Development.” “With this additional capital from two long-term oriented investors, we have strengthened our balance sheet and remain focused on growing our streaming subscriptions and returning to global profitability after our launch of the U.K. in 2012,” said Netflix CFO David Wells.
Want Entertainment News First? Sign up for Variety Alerts and Newsletters!