Netflix investors are 'as blind as Bird Box,' Citron Research says (NFLX)

bird box

Netflix
investors have too much confidence in the stock and lack adequate
judgment, the short-seller Andrew Left’s Citron Research said
Friday. 

NFLX investors at this level as blind as Bird
Box,” Citron Research wrote in a tweet. The firm said shares would
fall back to the $300 level — more than 10% below Netflix’s
Friday closing price. Bird Box is a Netflix movie that stars Sandra
Bullock as a mother who’s trying to protect her children after a
supernatural force that kills you if you see it wipes out most of
humanity.

Shares of the video-streaming giant have been on a
roller-coaster ride in recent months. 

On October 16, the company posted strong
third-quarter earnings and subscriber growth,
but shares tanked
more than 36% over the following two months as the broader tech
sector came under pressure. At the time, Bernstein analyst Todd
Juenger linked the
rising interest-rate environment
, which tends to penalize
companies, like Netflix, that are short of cash. 

After bottoming at $231.23 on December 24, Netflix shares have
rebounded by more than 40%. The gains have come after the
Federal Reserve said its future rate hikes were not on a preset
course.

The stock’s recent rally is too much, in the eyes of Left.
Netflix’s market capitalization has soared by $45 billion over the
past 12 days, the equivalent of 12 DreamWorks
Animations
, 12 Lionsgates,
10 Rokus,
or 5 Hulus, Citron said. 

But Wall Street is bullish on the tech giant.

“After six months of stock underperformance & key debates
emerging about competition, margins & [free cash flow], we
think these debates are better understood by investors and
reflected in the current stock price,”
UBS
analysts said on Thursday. The bank has a “neutral” rating
and $400 price target.

Netflix was up 56% in the past twelve months.

Travis Clark contributed to this story.

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Source: FS – All – Economy – News
Netflix investors are 'as blind as Bird Box,' Citron Research says (NFLX)