Netflix had a sufficiently good quarter. Still, tech investor Gene Munster feels that the manner in which the company is running their business leaves a lot to be desired. According to Munster, their business model is not a good one. He pointed over to the fact that Netflix has expectation has its 2019 free cash flow deficit to be $3.5 billion, in the negative. The tech investor said that Netflix would require to add 30 million new subscribers at $10 per month. Keeping in mind the current rate, that would most probably be achieved around the end of 2020 before they can actually get rid of burning out cash. Munster feels that as of now, Netflix can do certain things in terms of making some of the content expense a bit more efficient.
On Tuesday, Netflix reported its quarterly revenue. It managed to surpass the estimates. Apart from that, the company received little guidance for the quarter ahead. The CEO of Netflix Reed Hastings said that he is not worried about the competition, which is increasing constantly. A week back, Disney had announced that their streaming service of Disney+ would be available from 12th November for $69 per year. Apple also has plans of launching its streaming service, Apple TV+ during this fall season.
Gene Munster said that his concern is not related to the competition that exists in the market for Netflix as he believes that people would avail more than one service. What the investor actually feels is that the stock in itself, is not a good one, as it is already overvalued. As of now, the stock is aiming to move higher. So, the tech investor believes that there is growth in the international market, which has remained the same.
Dale Bennett was a Service Analyst by profession and writing is his calling. Owing to his interest, he has quit his 9 to 5 job and has been working as an author at Today News Air. He is a voracious reader and an avid traveller.