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Five months ago, Netflix was a $300 stock.Now it’s a ~$75 stock.
It’s raising $400 million at its new, clobbered stock price to fund all its new content investments.
And… it’s going to lose money next year!
Yes, that’s the latest news that Netflix tucked into the prospectus for the stock portion of its stock and convertible bond offerings:
We expect that consolidated quarterly revenue will be relatively flat until we can achieve positive net subscriber additions. As a result of the relatively flat consolidated revenues and previously announced increased investment in our International segment, we expect to incur consolidated net losses for the year ending December 31, 2012.
Previously, Netflix said it might lose money for the first few quarters of 2012. So this is a change.
For comparison, Netflix is projected to earn about $4.10 per share this year.
Will Netflix ever recover, or is it toast?
I’m optimistic, though this latest fund-raising and loss news is certainly an unwelcome surprise.
On a positive note, Netflix also says its subscriber cancellations in its hybrid streaming-and-DVD business are slowing, and gross additions for its streaming-only service are still strong…
Consistent with our Q4 guidance, our domestic streaming and DVD gross cancellations continued to steadily decline in October and the first half of November, while gross additions of new streaming subscribers remained strong. As a result, consistent with our prior guidance, we continue to expect our domestic streaming net additions to be about flat for November as a whole and strongly positive for December.