Netflix will be shoring up its balance sheet with an additional $400 million, the company announced tonight.Netflix is raising $200 million through the sale of zero coupon convertible notes.
Technology Crossover Ventures will be buying the notes, and have the right to nominate one person to the board of Netflix.
The notes are convertible into Netflix common stock at $85.80 per share.
Five months ago, Netflix’s stock was trading at nearly $300 a share.
Additionally, Netflix has sold $200 million worth of stock to T. Rowe Price.
To say the company’s timing is bad in raising this new capital would be an understatement. A few months ago, the equity sale would have been much less dilutive to shareholders.
The stock is fell 6% in after-hours trading on the news.
When asked about the sale, Netflix PR told us, “We did it because two strategic investors offered financing that can strengthen our balance sheet will we focus on returning to global profitability after the UK launch. We don’t need the money, but it’s always nice to have more money than you need when a) your business is incredibly dynamic and b) global markets are incredibly volatile.”