Why does Netflix for example have 14B in debt but have a market capitalization of 123B and generated 16B in revenue in 2018?

2 Answers

  • Amy
    Lv 7
    1 month ago

    Interest rates are insanely low.

    If you had a million dollars, would you pay off your mortgage early (which might be charging you 4% interest), or invest in a business that you expect will make a 10% return?

  • Greg
    Lv 7
    1 month ago

    They had to borrow money to make money and have not paid it off yet.

    • Ok but why. They don't need to operate with debt so why do it. Its not a start up anymore. They could in theory pay off the debt and use their on hand capital to operate while still in the black. So why have debt at all?

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