Case Study: Netflix Debt Funding - Individual Work
Introduction:
“Since 2011, Netflix has raised roughly $15 billion in debt (mostly by issuing junk bonds) to help fund its content production around the world. That led a group of analysts, reporters, and investors to question whether or not its business model was sustainable long term—especially as streaming competition increased.” (qz.com). Netflix is selling $1 billion of five-year non-callable junk bonds, with half denominated in dollars and half in euros. In its bond-offering announcement, Netflix says it may use the net funds it gains for "content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions."
You are to prepare a 150-word report discussing the concept of Junk bonds in terms of their quality and the pricing, provide a few businesses that issue and sell junk bonds, and critically explain how a business-like Netflix finds investors to purchase their junk bonds.
Students are welcome to refer to this article or any other relevant to the topic article or reading available on the internet.
Submitted in VLE on the due date.