Netflix Inc. is turning to Wall Street for help in fixing its financial and customer service woes.

Netflix, No. 13 in the Internet Retailer Top 500, yesterday filed an updated registration statement with the U.S. Securities and Exchange Commission to raise about $400 million in capital.

In its latest filing Netflix says the new influx of capital will be used to sustain operations, particularly in light of a big exodus by customers angry over an earlier plan to increase fees and split its digital entertainment and DVD by mail business into separate units. On Oct 24 when Netflix released its third quarter earnings, Netflix said it lost 3.3% of its domestic subscriber base in just one quarter. As a result its stock fell 44.2% in just a single day to around $74 per share on Oct. 25. Netflix hit an all-time high of $304.79 per share just three months ago.

Despite the move to raise more capital, Netflix’s stock continues to decline. In mid-morning trading on Wednesday Netflix was trading at about $69.70 per share. Netflix also warns in its SEC filing that even an influx of new working capital might not stem future financial problems. “In the third quarter of 2011, we made a series of announcements regarding our business, including the separation of our unlimited DVD by mail and unlimited streaming plans with a corresponding price change for some of our customers, the rebranding of our DVD by mail service, and the subsequent retraction of our plans to rebrand our DVD by mail service,” says Netflix. “If we are unable to repair the damage to our brand and reverse negative subscriber growth within our domestic segment, our results of operations, including cash flow, will be adversely affected.”

In his third quarter remarks to investors, CEO Reed Hastings noted that Netflix made a huge error in judgment in September when it announced—and then quickly reversed—a decision to split into two separate units. Long-time subscribers also remain angry over a decision in July to eliminate a combination DVD-by-mail and unlimited streaming rental plan priced at $9.99 in favor of offering consumers the option to subscribe to either format for $7.99 each. If customers want DVDs by mail and streaming they now have to subscribe to both and pay a minimum of $15.98 per month to have one DVD checked out at a time and access to unlimited streaming.

Besides losing revenue from customers canceling its service, Netflix also is spending more as it renews deals to stream movies and TV shoes at a time when such formidable competitors as Amazon.com Inc., Apple Inc. and Google Inc. are bidding up content prices as they offer consumers access to on-demand entertainment.

Netflix is will raise $400 in capital in two steps. A total of $200 million will be raised by selling just over 2 million shares of common stock. Another $200 million was raised through the private placement of convertible notes to funds affiliated with Technology Crossover Ventures, an investment banking firm. “We have strengthened our balance sheet,” says chief financial officer David Wells.