Netflix shares tumble to 20-month low after company raises $400m by selling back convertible debt

Netflix Inc's shares dropped as much as 7 per cent on Tuesday after it warned of a loss for 2012, a move that prompted several Wall Street analysts to cut their price targets for the online video and DVD rental company.

Analysts at Caris, Janney, UBS and Wedbush Securities all slashed their price targets for Netflix, citing the company's outlook.

Netflix had previously said it anticipates a loss only in the first quarter of 2012.

The problem, it said, is that the company has recently lost a ‘significant’ number of customers, who objected to Netflix's decisions to raise its prices and split up its streaming and DVD business -- an idea it later dropped.

Netflix's outlook adjustment came in a late filing on Monday, which said it had raised $400 million in new capital by selling convertible debt to long-time backer Technology Crossover Ventures and stock to funds managed by T.Rowe Price.


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