Can Netflix Survive?

Netflix's debt is rising at an exponential rate. And not once since inception has it made a profit. This cannot last.

The above chart is from the Seeking Alpha article Netflix Problem In One Simple Chart.

I condensed the chart so that it better fit on a page and I also added a bézier curve.

The full chart shows Netflix has lost money every quarter since 2012.

I seldom link to Seeking Alpha because they make you register to read articles in one page, otherwise, they make you scroll through stuff one page at a time. In this case, five pages.

This kind of user unfriendliness does not promote link sharing. Some people do not like subscribing out of fear there email address will be sold and they will be bombarded with crap.

I am an actual subscriber, yet the site cannot even bother to remember that. It asked me to login or subscribe to keep reading.

I stopped reading on page 2. It does not take five pages to understand that chart.

Netflix is very dependent on the bond market. If the bond market revolts before it can turn a profit, the company will cash in bankruptcy.

Mike "Mish" Shedlock

No. 1-25

Bonds (IOU's) are possibly even more an intangible than are common stocks. Humans have no cognitive pathways capable of grasping (and rationally evaluating) such intangibles. This is why long-term arithmetic charts of such things make no sense at all...yet no matter how high go prices/market caps/total debt, no limit exists.

Until it someday does. All of this is mass psychology, nothing more. It is social behavior of humans, no less defined by DNA than is eye color. Everyone appears to "believe" the Narrative (the music plays) until spontaneously they don't (the music stops.) After 37 years of credit inflation to the orbit of Mars, there won't be many chairs left when everyone tries to sit down. We just don't know when that will be.


No one is forced to work at such places.. And I am sure many of the workers have at least 1 child. Don't expand family on a near minimum wage job


The new normal in the funny money world is to raise money by issuing bonds to pay for those due now and with the left overs, buy back shares then fund operating costs and expansion that is completely out of synch with the real state of the economy. The Chinese have been doing it for decades, its the new global corporate model. Inevitably the bonds will default. The major share holders and BOD will walk away with millions of other people's money as the company gets stripped, broken up or rebranded. No one cares because before that happens the bond price rises on sentiment because our culture is all about living and investing for the moment, to hell with sustainability or honesty.