Feeds

Netflix raises $400m to steady its global expansion

Movie rental firm taps investors for extra cash as it moves into Europe

Remote control for virtualized desktops

Video rental firm Netflix, soon to be hitting the UK shores, has raised $400m in fresh capital from long-time investors to try to boost the firm after a tough few months.

The US company has dropped nearly 75 per cent of its market value since July, when it announced an ill-fated plan to split its DVD and streaming services and hike its prices while it was at it.

After a couple of months of withering criticism from the media and haemorrhaging subscribers, Netflix realised the error of its ways and dumped the whole Qwikster-DVD-spinoff idea for good, but the damage was done on the markets.

In a letter to shareholders outlining its third quarter results in October, the movie rentals firm said it had lost subscribers as a result of the moves, as well as damaging "our hard-earned reputation".

Netflix is now trying to get its feet planted firmly back on the ground as it takes on Lovefilm in the UK early next year, starting with a streaming-only service.

The firm grabbed the additional funds it needs from existing investors, signing a deal for $200m worth of convertible notes with Technology Crossover Ventures and affiliates.

That contract was dependent on Netflix managing to convince another investor to give it an additional $200m for stocks, according to an SEC filing, which it did in a deal with T Rowe Price Associates and affiliates.

"With this additional capital from two long-term oriented investors, we have strengthened our balance sheet and remain focused on growing our streaming subscriptions and returning to global profitability after our launch in the UK in 2012," David Wells, CFO, said in a canned statement. ®

Intelligent flash storage arrays

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Lawyers mobilise angry mob against Apple over alleged 2011 Macbook Pro crapness
We suffered 'random bouts of graphical distortion' - fanbois
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Simplify SSL certificate management across the enterprise
Simple steps to take control of SSL across the enterprise, and recommendations for a management platform for full visibility and single-point of control for these Certificates.