Why Netflix Is Returning to the Junk-Bond Market

The transcript discusses Netflix's financial strategy, focusing on its cash burn, debt, and content spending. Despite being cash flow negative, Netflix's bonds perform well due to its content strategy. The company plans to reduce borrowing and move towards self-funding, although cash burn is expected to continue through 2021. The transcript also explores competition from companies like Disney, Amazon, and Apple, and the potential for Netflix to be acquired by these strong investment-grade competitors.

What has been a primary focus for Netflix that contributes to its cash flow negativity?

• Infrastructure development

• Employee salaries

• Content spending

• Marketing campaigns

How has Netflix been participating in the bond market?

• By being inactive

• By focusing on short-term loans

• By being an active participant in the high yield market

• By reducing its debt

What is Netflix's plan regarding its borrowing strategy starting next year?

• Increase borrowing

• Maintain current borrowing levels

• Taper down the borrowing

• Eliminate all borrowing

Which companies are considered both competitors and potential acquirers of Netflix?

• Disney, Amazon, and Apple

• Google and Facebook

• Sony and Samsung

• Microsoft and IBM

What would be a positive outcome for Netflix creditors if the company were acquired by a strong competitor?

• Decreased stock value

• Higher interest rates

• Bonds being redeemed and included in the investment grade index

• Increased competition