Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

With junk bonds, as I understand, the potential for a great return is higher, with the risk that you may not get paid at all.

 

I'm bagholding at this point. Guess I'll be holding onto SQ for a year.

 

exactly... I don't get it. Is netflix trying to make money on the side? To whom are they issuing to?

 

A junk bond usually refers to the issuer's credit rating being below what's considered investment grade. Netflix is considered a junk-bond issuer based on the amount of cash it burns through and it's constant need for financing. So the bonds carry a higher risk than a bond from someone like GE or Apple might. Junk doesn't necessarily mean worthless though, as there is obviously a market for Netflix's debt.

 

Netflix issues the bonds to investors in order to raise cash to finance new shows. So in return for paying something like 9% on their debt, they get the money immediately and can keep making their original content (and buying licensing for movies, other shows, etc.).

 

I see. So they need the money quickly and are willing to pay a higher interest rate? As opposed to waiting a while and paying a lower rate.. is that correct?

 

Going to the debt market is generally faster than the equity markets. They may be able to get cheaper debt (or might not), but that would most likely require collateral or a preferred position from investors (first in line for claims).

 

Meh, that's what I get for not diversifying. But diversification is for my 401k. I'm riding this one out. Shoulda left some money out to buy a potential dip tho.

Netflix net growth looks good, I'm sure they'll be fine. I remember the whole "streaming only" fiasco. A lot of people freaked out about it, but look at Netflix now.

 

it's the way it goes lol. Gotta hold for a while to see gains... almost always lose money trying to find that bottom

 

how low can square go

 

Still did outstanding over the last 1 year, 5 years..

 

If Netflix drops to 280 I might have to buy in

 

Yeah. Bummer for now, I'll be long.. just need to be patient with this one.

 

Well the market sure is tanking

 

PSA.. if I say I'm going to put "more money in" the stock market, please slap me.

 

Common Netflix, keep dropping! I wanna grab a few shares

 

No no no, it needs to drop to 280 so I can buy in and then skyrocket up so we can both sell out and make some money

 

With the market being the way it is, this may take a while...

 

Seriously, grim day so far! Except for my realty investments surprisingly gaining a little ground today.

 

fuggin realty. I was born about 5 years too late.