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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 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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