Billionaire Mark Cuban Buying Netflix (NFLX) Stock
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(Updated - October 17, 2014 12:46 PM EDT)
Billionaire Mark Cuban tweeted that he is buying Netflix (NASDAQ: NFLX) stock on the recent weakness. He compared the stock favorably on a valuation basis to Yahoo! (NASDAQ: YHOO) and Twitter (NASDAQ: TWTR) and believes someone will try to buy the company.
The notification from Mr. Cuban comes following yesterday's 19% plunge in the stock following weak Q3 subscriber metrics and guidance.
The tweet from Cuban sent shares of Netflix immediately jumping off the lows, although the shares remain down 3.9%.
Discussing why he purchased the stock in a CNBC interview, Cuban called it "so far undervalued." He said if the value doesn't come up someone will buy them, although he said it is unclear if the company would sell.
Cuban said he is long 50,000 shares, which adds to a derivative position he put on prior. When he was asked what his price target on the stock was, Cuban said his target is to "never sell it."
Cuban explains that Netflix is subsidizing nearly all the content in Hollywood. He is not worried about the slowing growth of subscribers, saying they are still growing and every great company has hiccups along the way.
Cuban said Apple (NASDAQ: AAPL) or another large tech company could acquire the company.
I'm buying NFLX stock. At half of YHOO, 10B
— Mark Cuban (@mcuban) October 17, 2014#GetLongGetLoud
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