4 ms·

The story that I saw is that they have a lot of loans kicking in the next couple of years that will totally wipe out their profit margins. Looking at [0] it lo

by rtpg 4y ago

The story that I saw is that they have a lot of loans kicking in the next couple of years that will totally wipe out their profit margins. Looking at [0] it looks like it's.... manageable but you still need the money. If you're making 1.5 billion in profit and the next year you have 2 billion in debt to payoff... [0]: https://www.fool.com/investing/2022/04/21/netflixs-mountain-of-debt-isnt-a-problemyet/ https://www.fool.com/investing/2022/04/21/netflixs-mountain-... related reading from when things felt more rosey in 2019: [1]: https://www.ft.com/content/cf0f0bd6-4596-11e9-a965-23d669740bfb https://www.ft.com/content/cf0f0bd6-4596-11e9-a965-23d669740...

Narkov 4y ago
> If you're making 1.5 billion in profit and the next year you have 2 billion in debt to payoff... You refinance...of course. Debt is always cycled like this. Yes, interest rates are higher than before but they are still incredibly low.
- wowokay 4y ago
  What are the prospects on those rates?
- rtpg 4y ago
  I meant more that if this is the consistent case, then in practice you’re going to have problems in the midterm. I understand that cash flow issues can be resolved with corporate debt, but it requires convinced counter parties and, honestly, future revenue to bargain with. “Our subscriber count isn’t really going up and we need to borrow more money consistently every year” is not the same as “we are immensely profitable” (though I don’t think it’s a doomsday scenario in itself)
  - cykros 4y ago
    They're pivoting to including an ad-supported tier. Microsoft is on board for providing the ad-platform. I wouldn't worry about Netflix going away within the next few years. Whether it tops the markets like it did the past 10 years is another story, but I wouldn't worry about insolvency.

4 ms·

The story that I saw is that they have a lot of loans kicking in the next couple of years that will totally wipe out their profit margins. Looking at [0] it lo

by rtpg 4y ago

Narkov 4y ago
> If you're making 1.5 billion in profit and the next year you have 2 billion in debt to payoff... You refinance...of course. Debt is always cycled like this. Yes, interest rates are higher than before but they are still incredibly low.
- wowokay 4y ago
  What are the prospects on those rates?
- rtpg 4y ago
  I meant more that if this is the consistent case, then in practice you’re going to have problems in the midterm. I understand that cash flow issues can be resolved with corporate debt, but it requires convinced counter parties and, honestly, future revenue to bargain with. “Our subscriber count isn’t really going up and we need to borrow more money consistently every year” is not the same as “we are immensely profitable” (though I don’t think it’s a doomsday scenario in itself)
  - cykros 4y ago
    They're pivoting to including an ad-supported tier. Microsoft is on board for providing the ad-platform. I wouldn't worry about Netflix going away within the next few years. Whether it tops the markets like it did the past 10 years is another story, but I wouldn't worry about insolvency.