Netflix, Inc. (NASDAQ:NFLX) sells $2.2 billion of junk bonds as it braces for onslaught of competition

Netflix, Inc. (NASDAQ:NFLX) sells $2.2 billion of junk bonds as it braces for onslaught of competition

Netflix, Inc. (NASDAQ:NFLX) sells $2.2 billion of junk bonds as it braces for onslaught of competition

Netflix Inc. raised another $2.2 billion on Tuesday to help it finance new content as the battle for streaming customers heats up with a slate of offerings on tap.

Netflix NFLX, -4.09% issued junk-rated bonds over a two-day period that were denominated almost evenly in euros and dollars, with the euro portion pricing at 3.625% and the dollar parcel at 4.875%. Both sets of bonds give the streaming giant another source of low-cost funding through 2030, with proceeds earmarked for a range of purposes, including content, production and development and potential acquisitions.

The company will face highly competitive offerings from deep-pocketed rivals Walt Disney Co. DIS, +1.64% and Apple Inc. AAPL, -0.23% that will launch in November. Disney+ is priced at just $6.99 a month compared with the $8.99 Netflix charges for its basic plan, and will include its entire library of films and TV shows, including the Marvel and “Star Wars” franchises. Comcast Corp.’s CMCSA, -0.67% NBCUniversal will also pull some of its existing content from Netflix once licensing agreements expire, including “Friends” and “The Office,” which have proved popular with a millennial audience.

The Apple TV+ offering is priced at $4.99 a month and will be free for one year with the purchase of a new Apple device. For now, the content slate looks slim compared with Netflix, but the iPhone maker is expected to grow through acquisition.

Those services will be followed by offerings from Comcast’s Peacock service and AT&T Inc.’s T, -0.16% HBO Max are due in spring 2020. Netflix is already competing with services from Amazon.com AMZN, -1.12% and Hulu.

Just last week, Netflix acknowledged that the coming slew of competition may hurt new-subscriber growth. The company said it expects that subscriber growth will decline year-over-year in the usually strong fourth quarter and for the entire year, even with a strong slate of new shows.

“The launch of these new services will be noisy,” Netflix executives said in their quarterly letter to shareholders. “There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance.”

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 284.51.

The projected lower bound is: 247.11.

The projected closing price is: 265.81.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 10.0601. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 3 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 40.90. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 19 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -78. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 13 period(s) ago.

Rex Takasugi – TD Profile

NETFLIX INC closed down -11.360 at 266.690. Volume was 41% above average (neutral) and Bollinger Bands were 30% narrower than normal.

Open     High      Low     Close     Volume___
271.159 275.410 265.800 266.690 11,865,593
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 280.04 284.72 335.87
Volatility: 57 42 41
Volume: 14,471,813 9,045,041 8,201,352

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

NETFLIX INC is currently 20.6% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of NFLX.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on NFLX.O and have had this outlook for the last 6 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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