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Netflix to raise another US$1.5bn in debt as it dials up content spending

The video streaming giant plans to spend around US$8bn on content alone this year as it looks to get its subscriber base to a critical mass and fend off competition from Amazon and Hulu
stranger things cast
In terms of profitability, Netflix is adopting a ‘short-term pain, long-term gain’ strategy

Video streaming giant Netflix Inc (NASDAQ:NFLX) is tapping the debt market once again as it looks for more cash to fuel the rapid expansion of its userbase.

The heavily loss-making firm said Monday it plans to raise another US$1.5bn in fresh debt, despite having only raised US$1.6bn last October.

READ: Netflix raises US$1.6bn in fresh debt

Netflix is spending heavily on its content in order to drive subscriber growth around the world and fend off competition from the likes of Amazon.com Inc (NASDAQ:AMZN) and Hulu.

Earlier this month, the California-based company smashed Wall Street forecasts for subscriber additions thanks to hit original shows such as Altered Carbon and Stranger Things.

Netflix added that it plans to spend around US$8bn on content alone this year, which means it still expects free cash flow to be negative in the second half.

According to the latest quarterly report, Netflix had long-term debts of US$6.5bn and cash in the bank of just over US$2.5bn.

The firm said this latest cash injection will be used for “general corporate purposes”, which may include content acquisitions and production.

Netflix shares rose 0.6% to US$329.60 shortly before the opening bell in New York.

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