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Netflix, Inc. (NASDAQ: NFLX) is back! Are its finances? After things got so bad that investors were starting to call for the end of Reed Hastings’ tenure as CEO and after Carl Icahn even got involved, the movie rental club has seen shares come back with a vengeance. Netflix even added more members than expected and posted positive earnings rather than a loss in its earnings report last week. Now shares have risen more than 200% from last year’s lows and the stock is back up above $165 and close to challenging a 52-week high of $177.25. With everything looking so good, we have to address a negative credit rating call on Tuesday by Standard & Poor’s on Netflix.

A proposed $400 million senior note offering due out in 2021 was given a credit rating outlook change on its “BB-” to negative. The BB- rating was affirmed, but investors will want to know that this is considered at junk bond status and the negative outlook implies that a rating downgrade could occur during a review period in the months ahead.

S&P said that its recovery rating of 3 implies an expectation of an average recovery of 50% to 70% for the debt holders if Netflix were to default on its debt. S&P also said that it sees discretionary cash flow deficits in 2013 and going into 2014. The firm also worries about an increased debt leverage as well as risks tied to the company’s original programming costs. S&P sees this happening simultaneously with higher movie library costs and Netflix’s international expansion.

The good news is that S&P sees revenue and EBITDA expanding in 2013 and in 2014. It also expects continued subscriber growth. S&P gave an assessment of management and corporate governance as “fair.”

If this is truly a word of caution, Netflix investors are not paying attention. Its short sellers have also been forced to scramble for cover as well. With shares up 3.8% at $168 today, this stock is up more than 80% from the closing price of $92.59 on December 31.