Daniel Daza/Netflix/”Narcos”Netflix investors are blissfully ignoring the streaming giant’s ballooning cash burn, according to one of the company’s biggest bears on Wall Street. “Investors are oblivious to the fact that Netflix burns cash at an alarming rate,” Wedbush Securities analyst Michael Pachter told Business Insider. His price target of $110 is a full 64% below the stock’s $310 price. Pachter expects Netflix to borrow another $2.5 billion this year, and another $3 billion in 2019, adding to its already growing debt and negative free cash flow growth.”If free cash flow continues to get worse, the debt balance could approach $15 billion, or around $30 per share for a company that “earns” $3 to $4 per share annually,” he said. “What’s not to love about that?” Netflix’s massive spending has been largely well received by Wall Street as it ramps up content offerings. Netflix CFO David Wells said earlier this year that the company expects to spend a staggering $8 billion on about 700 new original shows in 2018. In February, the company poached Ryan Murphy, the well-known Hollywood producer of “Glee” and “American Horror Story, from 21st Century Fox with a five-year contract worth $300 million. He starts in July. The investments… Read full this story
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