- Netflix (NASDAQ:NFLX) is — once again — tapping the debt market.
- The FANG stocks are down for the latest one and three-month period.
- Today’s action was mixed; the markets are still trying to find a bottom.
Netflix is one of the FANG stocks — four of the largest and most influential tech issues that are primary drivers of the current rally. Today, the company announced yet another venture into the bond market to raise cash to fund the development of original content. This further exacerbates the company’s primary problem, which is its inability to generate positive cash flow, which has been negative since 2015. EBITDA was a paltry 11% of gross revenue for the trailing 12 months. While the debt/asset ratio is still a very conservative 35%, I have reservations about the value of the company’s digital assets. Although the company is still in the middle of its growth “glory days,” it isn’t making any kind of financial pivot to a sustainable growth model.
And speaking of the FANGs, they haven’t been doing well lately: