Netflix shares tumble premarket on lower 2012 outlook
Netflix Inc's shares tumbled some 6 percent in premarket trading on Tuesday after it lowered its 2012 outlook leading several Wall Street analysts to cut their price targets for the online video and DVD rental company.
Analysts at Caris, Janney, UBS and Wedbush Securities all slashed their price targets for Netflix citing Netflix's revised outlook, clarifying it sees losses in 2012. It had previously said it only anticipates losses in the first quarter of 2012.
Netflix's outlook adjustment came in a late filing on Monday, which said it had raised $400 million in new capital by selling convertible debt to long-time backer Technology Crossover Ventures and stock to funds managed by T.Rowe Price.
Most analysts welcomed the extra capital infusion as a form of insurance as Netflix invests in buying and creating more programing for its online video subscribers.
The Los Gatos, California, company has had a troubled second half of the year during which it has lost about two-thirds of its market value since its shares touched a high of nearly $300 in July.
There have been a range of strategic missteps that have led to more recent questions about its financial strength in the face of rising content costs and competitive pressures from the traditional cable and satellite TV companies.
(Reporting by Yinka Adegoke, editing by Maureen Bavdek)
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