Netflix (NFLX) Files Common Shelf in Connection with $200M Zero Coupon Convertible Notes Agreement

November 21, 2011 5:09 PM EST
Netflix (Nasdaq: NFLX) filed a registration with the U.S. Securities and Exchange Commission to sell, from time to time, shares of Common Stock.

The offering is being made in conjunction with a Note Purchase Agreement with funds affiliated with Technology Crossover Ventures, or TCV, related to the proposed issuance of $200.0 million aggregate principal amount of Zero Coupon Convertible Subordinated Notes due 2018. The announcement was made earlier in an 8-K.

According to the agreement, the Notes will be issued under an indenture between the Company and a trustee. The Notes do not bear interest. The Notes will mature on December 1, 2018, subject to earlier conversion or repurchase.

The initial conversion rate for the Notes is 11.6553 shares of the Company’s common stock, par value $0.001 per share, per $1,000 principal amount of Notes. This is equivalent to an initial conversion price of approximately $85.80 per share of Common Stock. Holders may surrender their Notes for conversion at any time prior to the close of business on the business day immediately preceding the maturity date for the Notes.

Under the terms and conditions of the Purchase Agreement, TCV shall have the right to nominate one nominee to the Company’s Board of Directors. As of the date hereof, TCV has designated Jay Hoag as a nominee for Board Designee and because Mr. Hoag is currently a member of the Board of Directors, no action by the Company and no adjustment to the Board of Directors will be required as of the closing of the private placement.

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