Netflix unveils $2 billion debt issue to fund new content

Netflix announced its third tap of debt markets in a year on Monday, aiming to raise about $2 billion as the streaming video pioneer invests heavily in original shows. (Shutterstock)
Updated 22 October 2018
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Netflix unveils $2 billion debt issue to fund new content

LONDON: Netflix announced its third tap of debt markets in a year on Monday, aiming to raise about $2 billion as the streaming video pioneer invests heavily in original shows and acquiring content to fend off intensifying competition.
Netflix bond prices were little moved immediately after the announcement, but can be expected to fall, as the additional debt adds to the company’s credit risk. Shares in the company dipped 1 percent in early trading.
Netflix said in April it planned to raise $1.5 billion in debt, after raising $1.6 billion in October last year, bringing the total to about $5 billion.
The company has consistently said that it expects to fund content acquisition through the high-yield bond market and is expected to spend around $9 billion on content this year, based on blockbuster third-quarter results announced last week.
The new debt will be in the form of senior notes denominated in US dollars and euros — a type of debt the company needs to repay if it goes bankrupt.
Bearish bets against Netflix’s existing $8.4 billion of junk-rated bonds have more than tripled this year to an all-time high of $347 million, Reuters reported last week.
“The short balance in the actual bonds reflects a view that (the bonds) will decline in value if or when they issue more debt,” said Samuel Pierson, analyst at IHS Markit.
Netflix’s total debt stood at $11.83 billion as of Sept.30.
Netflix said on Monday it intends to use the net proceeds from this offering for general corporate purposes, which may include content acquisitions, production and development, potential acquisitions and strategic transactions.


Facebook says it uploaded email contacts of up to 1.5 million users

Updated 18 April 2019
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Facebook says it uploaded email contacts of up to 1.5 million users

  • In March, Facebook had stopped offering email password verification as an option for people who signed up for the first time
  • There were cases in which email contacts of people were uploaded to Facebook when they created their account

APRIL: Facebook Inc. said on Wednesday it may have “unintentionally uploaded” email contacts of 1.5 million new users since May 2016, in what seems to be the latest privacy-related issue faced by the social media company.
In March, Facebook had stopped offering email password verification as an option for people who signed up for the first time, the company said. There were cases in which email contacts of people were uploaded to Facebook when they created their account, the company said.
“We estimate that up to 1.5 million people’s email contacts may have been uploaded. These contacts were not shared with anyone and we are deleting them,” Facebook told Reuters, adding that users whose contacts were imported will be notified.
The underlying glitch has been fixed, according to the company statement.
Business Insider had earlier reported that the social media company harvested email contacts of the users without their knowledge or consent when they opened their accounts.
When an email password was entered, a message popped up saying it was “importing” contacts without asking for permission first, the report said.
Facebook has been hit by a number of privacy-related issues recently, including a glitch that exposed passwords of millions of users stored in readable format within its internal systems to its employees.
Last year, the company came under fire following revelations that Cambridge Analytica, a British political consulting firm, obtained personal data of millions of people’s Facebook profiles without their consent.
The company has also been facing criticism from lawmakers across the world for what has been seen by some as tricking people into giving personal data to Facebook and for the presence of hate speech and data portability on the platform.
Separately, Facebook was asked to ensure its social media platform is not abused for political purposes or to spread misinformation during elections.