Netflix Inc. said it agreed to raise about $400 million in cash from selling stock and bonds that can be converted into stock, a move seen by analysts as a sign that efforts to acquire video content are proving expensive.
The DVD-rental and online-video company also expects to be unprofitable for 2012, according to the regulatory filing for the fund-raising. The company added that revenues would be flat until its subscriber base rises, but said it couldn't be certain whether such growth would happen.
The announcements come after a months-long rough spell for Netflix. Customers and investors howled after it raised prices on a popular subscription plan by 60% in July, and when it announced in September a since-aborted plan to separate its DVD-rental-by-mail service into a separate business called Qwikster.
The Los Gatos, Calif., company has said it lost 800,000 subscribers in this year's third quarter, while its shares have fallen 74% since the price hike was announced on July 12.
The DVD-rental and online-video company also expects to be unprofitable for 2012, according to the regulatory filing for the fund-raising. The company added that revenues would be flat until its subscriber base rises, but said it couldn't be certain whether such growth would happen.
The announcements come after a months-long rough spell for Netflix. Customers and investors howled after it raised prices on a popular subscription plan by 60% in July, and when it announced in September a since-aborted plan to separate its DVD-rental-by-mail service into a separate business called Qwikster.
The Los Gatos, Calif., company has said it lost 800,000 subscribers in this year's third quarter, while its shares have fallen 74% since the price hike was announced on July 12.
Netflix spokesman Steve Swasey said the company doesn't have a pressing need for more cash, "but it's always nice to have more money than you need." He said the company has no immediate plans to use the funds. He added that subscriber cancellations have continued to decline, meaning that Netflix could soon see its subscriber base grow.
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Read more: http://online.wsj.com/article/SB10001424052970204443404577052710201759858.html#ixzz1g1x6ZVFE
