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Netflix (NFLX) is down 6% AH after declaring in an 8-K it's selling $200M of zero coupon...

Netflix (NFLX) is down 6% AH after declaring in an 8-K it's selling $200M of zero coupon convertible notes to VC firm TCV, at a conversion price of $85.80/share (60% less than what Netflix traded at 3 months ago). As part of the deal, TCV gains the right to nominate a candidate to Netflix's board. The deal is likely raising fears about Netflix's cash burn, given shrinking margins and rising content costs. (earlier) Update: Netflix will also be issuing $200M in stock to other parties as part of the deal.
Comments (5)
  • Slim Shady
    , contributor
    Comments (388) | Send Message
     
    As a condition to the purchase of the $200 million of zero coupon convertible notes, TCV is requiring the sale of $200 million of common stock to non-affiliated 3rd parties.
    21 Nov 2011, 05:37 PM Reply Like
  • Andrew Shapiro
    , contributor
    Comments (1899) | Send Message
     
    While Hastings and mgmt have sold over $100MM of stock in the market and directed netflix to buy back $200MM of stock in just the first 9 months of this year at prices over $200/share, now the company is selling effectively $400MM of new stock at below $86/share prices.

     

    1 new board member is not enough - This company is horribly governance dysfunctional.
    21 Nov 2011, 06:12 PM Reply Like
  • Canary Cash
    , contributor
    Comments (471) | Send Message
     
    I was waiting for this...I just figured they would put a positive spin on it somehow..."we can survive for one more year!"
    21 Nov 2011, 05:51 PM Reply Like
  • lucagrs
    , contributor
    Comments (68) | Send Message
     
    it's as simple as that, it's game over for NFLX.
    21 Nov 2011, 09:16 PM Reply Like
  • Andrew Shapiro
    , contributor
    Comments (1899) | Send Message
     
    Note the netflix S-3 for $200MM of new $nflx shares http://1.usa.gov/sfqrA8 has again dropped EPS guidance - now guiding 2012 EPS lower to loss for ENTIRE 2012. street still had estimated profit/share
    22 Nov 2011, 10:05 AM Reply Like
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