Netflix is fueling its ballooning cash burn with $2 billion in new debt

Published Mon, Oct 22 201810:17 AM EDTUpdated Mon, Oct 22 20184:10 PM EDT

Sara Salinas @in/saracsalinas @saracsalinas

Key Points

The company announces it intends to issue a new round of notes.
Shares of Netflix fall as much 3 percent but erase nearly all of those losses.

Netflix Co-founder, Chairman & CEO Reed Hastings attends Q&A during Transatlantic Forum as part of Series Mania Lille Hauts de France festival on May 3, 2018 in Lille, France.

Sylvain Lefevre | Getty Images

Netflix is fueling its ballooning cash burn with $2 billion in new debt.

The company announced Monday it intends to issue a new round of notes for "general corporate purposes, which may include content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions."

Shares of Netflix fell as much 3 percent Monday, but erased most of those losses to close roughly 1 percent down.

The $2 billion adds to the growing debt burden on Netflix's balance sheet. The company reported almost $12 billion in total debt as of Sept. 30.

At the same time, Netflix is burning cash at faster and faster rates.

In its third-quarter earnings report last week, the company reported negative free cash flow of $859 million. The company said it expects a negative free cash flow of $3 billion for 2018.