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Netflix Inc. released a good quarter on Tuesday, but technology investor Gene Munster was not particularly impressed.
"This is not a good business model."
The managing partner and co-founder of Loup Ventures, a former Piper Jaffray analyst, told CNBC's "Fast Money" on Tuesday that he did not see how the streaming giant would soon make money.
In his report on the results, Netflix
NFLX, + 3.04%
said it added a record number of 9.6 million subscribers in the first quarter and posted a sharp increase in its revenues, which reached $ 4.5 billion, compared with $ 3.7 billion in the same quarter of the year before. But he warned that his spending would rise and said he expected a deficit of available cash of about $ 3.5 billion for the year.
This triggered a red flag for Munster.
"At $ 10 a month, they should add 30 million [subscribers], He told CNBC. "At the current rate, it probably puts the end of the 2020s before it somehow mitigates this spending in money. Now, they can do some things to make some content costs a little more efficient. But I think that in general, more competition is not good for that. "
This competition will be held later this year, when Apple Inc.
AAPL, + 0.01%
, Walt Disney Co.
DIS -1.62%
and AT & T
T + 0.72%
WarnerMedia launches its own streaming services, which could distract viewers from Netflix.
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Munster told CNBC he thought Netflix would do very well in the face of competition – "they will hold a large market share in the US and around the world", while pointing out that its action is overvalued and that investors can do better by placing their money elsewhere. "I think there are much better places to play in technology," he said.
This is not everyone who thinks it. Earlier Tuesday, Bryan Kraft, an analyst at Deutsche Bank, had developed a Netflix solution, saying the company's long-term trend looked good, even with new competition.
After rising 3% in normal trading, Netflix shares fell slightly after normal working hours, following the release of the earnings report. Its stock has increased by 34% since the beginning of the year, compared to that of the S & P 500.
SPX, + 0.05%
16% gain this year.
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