Netflix shares surged more than 10% this month after it reported better-than-expected subscriber growth. For the year, the stock is up nearly 50%. It closed Friday at $184.04, up $1.36 or 0.74%.
“That's a lot of capital up front, and then you get a payout over many years,” Chief Executive Reed Hastings said in a recent investor call. “The irony is the faster that we grow and the faster we grow the owned originals, the more drawn on free cash flow that we'll be.”
First off, Netflix doesn't have $20 billion in debt. Netflix has $4.8 billion in debt, and then deals with content partners for $15.7 billion. Notable difference, but, yes, Netflix is going to need to pay out that money.
To put this in context
TLDNR Netflix owes 20 Billion on paper and Disney owes 50 Billion on paper. They are both good for it.
“That's a lot of capital up front, and then you get a payout over many years,” Chief Executive Reed Hastings said in a recent investor call. “The irony is the faster that we grow and the faster we grow the owned originals, the more drawn on free cash flow that we'll be.”
First off, Netflix doesn't have $20 billion in debt. Netflix has $4.8 billion in debt, and then deals with content partners for $15.7 billion. Notable difference, but, yes, Netflix is going to need to pay out that money.
To put this in context
TLDNR Netflix owes 20 Billion on paper and Disney owes 50 Billion on paper. They are both good for it.