Billionaire David Einhorn Talks “Bubble Shorts” (Tesla, Amazon, Netflix) in Q3 Investor Letter

Netflix, Inc. (NASDAQ:NFLX) had a big quarter, gaining 21% thanks to beating quarterly expectations, but Greenlight remains convinced that the company is burning way too much cash, taking umbrage with CEO Reed Hastings’ second-quarter suggestion that negative free cash flow could actually be seen as a sign of enormous success for the company.

Netflix is off to a strong start to the fourth-quarter as well, as the company delivered strong quarterly results, which lead to several analysts hiking their price targets on the stock. Analysts believe that Netflix’s latest subscription price hike will have little impact on its low churn rate, and that it continues to distance itself from competitors with its growing library of original content.

Greenlight next discussed two of its best performing stocks during the third-quarter, which were General Motors Company (NYSE:GM) and CONSOL Energy Inc. (NYSE:CNX). While Greenlight was involved in a proxy contest with GM that was bitter at times, a fight which it ended up losing, it nonetheless remains a firm believer in the company, for which it’s been greatly rewarded during the past two months.

While Greenlight praised the company for unloading its European division and for positioning itself well for the coming Auto 2.0 revolution, it couldn’t help but note that the company issued $1 billion in perpetual preferred stock with a yield of 5.25%, which would’ve made its proxy proposal even more attractive. The company had claimed that such stock would yield in the double digits, which was one of its main points of contention against Greenlight’s Dividend Shares proposal.

Lastly, shares of CONSOL Energy Inc. (NYSE:CNX) rebounded in the third-quarter, though they remained down year-to-date, and have fallen again in the fourth-quarter. Greenlight expressed surprise that CONSOL Energy’s shares haven’t enjoyed a strong revaluation as the date nears for the company to separate its coal and natural gas businesses. Nonetheless, it remains convinced that the market will eventually reward the company’s shareholders with notable gains once it revalues the company in its current (at that time) form.

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