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Exclusive: Mark Cuban Compares Netflix To Amazon, Says It Has Multiple Untapped Levers

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Exclusive: Mark Cuban Compares Netflix To Amazon, Says It Has Multiple Untapped Levers

With earnings season beginning to ramp, all eyes were on Netflix, Inc. (NASDAQ: NFLX) Monday, and the result was anything but chill.

Netflix narrowly missed on top-line revenue against Street estimates. More importantly, net new member numbers missed forecasts of 2.5 million, reporting only 1.7 million members in Q2.

"We are growing, but not as fast as we would like or have been," the company said in its release.

Related Link: Netflix Craters On Big Subscriber Miss

Shares fell 15 percent to $84.55, but not all investors were worried. Billionaire, entrepreneur and Netflix investor, Mark Cuban, spoke in defense of Netflix's shaky report.

When asked to judge the report, Cuban told Benzinga he looks at Netflix much like he does Amazon.com, Inc. (NASDAQ: AMZN).

"I'm not worried about quarter to quarter fluctuations," Cuban said in an email. "They continue to dominate the content and consumer delivery for over the top."

When asked about the unexpected churn in Netflix's Q2, Cuban said, "They are still in start up mode which is exactly where they should be. The day they manage for earnings, is the day I sell the stock."

As for the biggest risk to Netflix at this juncture, Cuban believes at under $40 billion in market cap, management must watch for a hostile takeover attempt.

Despite this risk, Mark Cuban thinks Netflix will be just fine, as it has multiple levers to pull on that are untapped at this point such as advertising, content sales and licensing.

Image credit: Esther Vargas, Flickr

 

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