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Netflix Borrows Pile of Money, Says Nothing is Wrong

By Steven Lloyd Wilson | Posted Under Trade News | Comments (12)

netflix_eaten.jpg

Having managed to infuriate both their customers and their stockholders earlier this year, Netflix has apparently decided to ride the insanity right into oblivion. They are now selling $200 million of bonds to Technology Crossover Ventures in return for stock and putting someone on the board. Basically, they’re diluting all their current shares of stock and giving up a little bit of control for a giant pile of money.

Investors did not take kindly to the move, with Netflix shares dropping again to a new low in what has already been a horrific year. And analysts are not being particularly kind, labeling the move as “bad to the point of desperation.”

Said Netflix: “Netflix has no cash or general liquidity needs, and therefore we have no immediate plans to use this capital. We don’t think we need it, but it’s always nice to have more money than you need.”

Oh yes, of course. They don’t actually need that pile of money that they just gave a pint of blood for, they just like having it. I’m curious what they’re going to do with it then, if they’re not going to actually spend it. Fill a swimming pool? At this point, I don’t think they’re running a company so much as creating an elaborate performance art piece on badly running a company.

(THR)









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Comments

And of course my first thought is, "You can't go under Netflix! I need my Arrested Development!"

Posted by: Socrates_Johnson at November 22, 2011 10:19 AM

"We don’t think we need it, but it’s always nice to have more money than you need."

Pay no attention to that man behind the red envelope!

Posted by: Jast at November 22, 2011 10:22 AM

This week I added the 1 Disc at a Time option back to my streaming only Netflix. I didn't want to but since Netflix effectively killed video stores, the only other option was Red Box. Which in the summer wasn't too bad, in winter standing in line behind dipshits that are browsing it's intolerable. Also, waiting 2 months to watch "THOR" because Red Box never had it in stock is far more attention than that movie deserves.

So I really hope Netflix gets their shit together because I don't have another option for moives other than pay per view or blockbuster's mail service(shudder.

Whoever is running Netflix needs fired. Publicly. And possibly flogged. They're managing board is making some truly awful decisions lately.

Posted by: TylerDFC at November 22, 2011 10:22 AM

Hey TylerDFC there is an option at redbox.com where you can reserve copies of movies and go pick them up at the kiosk of your choosing. If you search your zipcode it will tell you where the movie is in the box. I live/work around somewhere near 10 of the kiosks so I can usually find whatever movie I want with little hassle. I would recommend it for those who had to dump their disc service.

Posted by: EshinX at November 22, 2011 10:30 AM

If Netflix goes under, who's going to take their place? I've been watching streaming stuff on Amazon Prime, but their selection is pretty limited and they're a little shady in the videos they say you can watch. If you search within the results, they give you, it unchecks a little box and shows you every instant video on the site, not just the free stuff on Prime. I signed up thinking I could watch Community and Parks & Rec and was disappointed, but at least I'm getting into Dr. Who.

Posted by: Lucas at November 22, 2011 11:20 AM

EshinX: I didn't try reserving because you have to pay upfront. When we have used the locator and gone to pick up when it says the movie is available, usually it's not in. Even though the app says it should be. So, there are some kinks I've found.

Posted by: TylerDFC at November 22, 2011 11:28 AM

So what's so bad about Blockbuster mail service? (No, I'm really asking.)

I also like to have piles of money around so I can roll in them, but sometimes, the things you have to do for that pile of money outweigh the benefits.

Posted by: MM at November 22, 2011 1:05 PM

My problem with Netflix is that the more I want to believe in it, the crazier their business decisions become. I thought with the addition of “Arrested Development” to their fold, they were trying to turn around their latest trend of pissing off shareholders and customers. But this latest move in borrowing money and claiming not to be in need of money, but borrowing just for the sake of borrowing is a bit much. I hope for the sake of this company the CEO holds a press conference and announces he’s entering treatment for drug abuse which caused him to make these insane business decisions. Otherwise a year from now Netflix will be a distant memory.

Posted by: Pookie at November 22, 2011 1:34 PM

@TylerDFC - I've found the RedBox locator to be pretty spot on... If you look something up without reserving, show up and it's not there, I would bet that is because someone else has rented the movie.

Posted by: justme at November 22, 2011 2:54 PM

I know they're being awful, but thinking about not having Netflix gives me palpitations. The last time I didn't have it, I bought like 3 series on DVD in the space of two weeks. I don't have that kind of cash!

Posted by: blorft at November 22, 2011 10:29 PM

Since they've been stealing from me for a very long time, they need to go out of business. I just want my money back. Long story but whoever has Netflix need to check their bank statements reeeal careful. I was getting double billed for a long time even after I changed all of my info including my name. They wouldn't tell me where the other discs were going or any other information unless I filed a police report. Long, long infuriating story. It's only because I was not paying attention when I thought I was meticulous about my account. Netflix can shove it. I only feel sorry for the day to day workers who may lose their jobs soon.

Posted by: Candy at November 23, 2011 3:19 AM

P.S. Blockbuster is trash but I'm going with them and toning down my renting. They have no documentaries that I can find but it's ok. I'm taking a step back. I used to think I couldn't do without my dvds. I can.

Posted by: Candy at November 23, 2011 3:23 AM