Netflix Will No Longer Borrow, Ending Its Run of Debt (nytimes.com)
Netflix has reached a financial milestone: It no longer needs to borrow money.
Netflix announced Tuesday in its fourth-quarter earnings report that it would not “need to raise external financing for our day-to-day operations,” a significant move for the heavily indebted company.
In less than a decade, the streaming giant borrowed over $16 billion to feed its titanic appetite for content. The reason: It didn’t make enough money to cover both its entertainment productions and its business costs, like payroll and rent and marketing.
That fact has caused a longstanding gripe over Netflix’s business model, and it’s why some observers have long argued that Netflix is a debt-ridden house of cards that would eventually come tumbling down.
By: Edmund Lee