As Netflix Trumpets Stock Value, Debt Investors Want Cash Flow

  • As company eyes junk-market return, cash flow is questioned
  • ‘Sanity check’ needed amid online TV network’s growth plans
Stephen Auth of Federated Investors and Eaton Vance Management’s Henry Peabody discuss Netflix’s earnings.(Source: Bloomberg)
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Netflix Inc. is using its newly minted $100 billion market capitalization to tout a return to the junk-bond market, but debt investors may cast a skeptical eye on the online TV network.

“When will the company ever produce positive free cash flow?" Bloomberg Intelligence analyst Stephen Flynn said in an interview. "The challenge for a bondholder is your upside is not the same as it is for an equity holder.”