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Netflix, Inc. (NFLX): Key Metrics Are Deteriorating Says Billionaire Einhorn

Netflix, Inc. (NASDAQ:NFLX) remains a major target of billionaire hedge fund manager David Einhorn of Greenlight Capital, who’s been launching verbal salvos at the company for two years, including a hilarious takedown of its vaunted series House of Cards.

In Greenlight Capital’s second-quarter letter to investors, Einhorn took the video streaming company to task over its first-quarter results and free cash flow burn, the latter critique coming just days before Netflix updated its negative free cash flow estimate for 2017 to between $2 billion and $2.5 billion, compared to the previous estimate of $2 billion. The company even went so far as to declare that it will be free cash flow negative “for many years”, and that this should be seen as “an indicator of enormous success”.

Netflix of course believes that those investments in original content will result in greater returns down the road, but with its free cash flow situation only getting worse (it was $1.7 billion in 2016), one certainly has to wonder at what point the benefits start manifesting. Einhorn himself touched on that point in his latest letter, reiterating that Netflix hasn’t demonstrated that it’s able to turn...


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