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By SHARA TIBKEN
Netflix Inc. shares fell to their lowest point in over a year, a day after the Internet video company raised concerns about its cash level and said it will post a loss for 2012.

The Los Gatos, Calif.-based Internet video company on Monday said it was raising $400 million in cash and warned of a loss in 2012 amid stagnant revenue and increased investment in its international business. Netflix said revenue would be flat until its subscriber base rises, but wasn’t certain that such growth would happen.

The announcements come after a months-long rough spell for Netflix. Customers and investors howled after it raised prices on a popular subscription plan by 60% in July, and when it announced in September a since-aborted plan to separate its DVD-rental-by-mail service into a separate business called Qwikster.

Shares, down 63% over the past 12 months, fell 6.8% to $69.42 in Tuesday morning trading. They fell as low as $69, their lowest point since February 2010.

Credit Suisse said it expects Netflix’s $400 million sale of stock and convertible bonds will dilute existing shareholders by about 10%. “This may place some near-term pressure on the stock,” it said in a research note. “However, we are positive on the capital infusion, as it strengthens NFLX’s balance sheet and improves its financial flexibility.”

Netflix is selling off stocks and bonds in an attempt to raise $400 million, illustrating how acquiring the video content is expensive, Deal Journal’s Shira Ovide reports on Markets Hub. Photo: Getty Images.
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Netflix spokesman Steve Swasey said Monday that the company doesn’t have a pressing need for more cash, “but it’s always nice to have more money than you need.” He said the company has no immediate plans to use the funds. He added that subscriber cancellations have continued to decline, meaning that Netflix could soon see its subscriber base grow.

But Janney Capital Markets analyst Tony Wible said the issuance should raise concerns for investors that also play into his growing concern about the disparity between DVD and streaming profitability.

“Investors need to ask why one of largest subscription-based platforms in the world needs capital,” he said. “The lack of profitability on almost 23 million global streaming subs suggests that this business may not be as lucrative as the bulls believe.”

Write to Shara Tibken at shara.tibken@dowjones.com

Read more: http://online.wsj.com/article/SB10001424052970204443404577054040663461880.html#ixzz1eSRxkv1y

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