Whitney Tilson Explains Why He Covered His Netflix (NFLX) Short

A letter from Whitney Tilson of hedge fund T2 Partners on why he covered his Netflix (Nasdaq: NFLX) short is making the rounds.

In the letter Tilson said, "With the stock up nearly 25% since then, one might assume that we'd think it's an even better short today, but in fact we have closed out our position because we are no longer confident that our investment thesis is correct There are three primary reasons for this:

1) The company reported a very strong quarter that weakened key pillars of our investment thesis, especially as it relates to margins;

2) We conducted a survey, completed by more than 500 Netflix subscribers, that showed significantly higher satisfaction with and usage of Netflix's streaming service than we anticipated (the results of our survey are in Appendix A, attached); and

3) Our article generated a great deal of feedback, including an open letter from Netflix's

A copy of the letter can be found here.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Verizon planning new round of layoffs this week - Barron’s
• Netflix (NFLX) call put ratio 2.9 calls to 1 put into quarter results
• Guggenheim Reiterates Buy Rating on Netflix (NFLX)