As Netflix (NFLX) shares keep getting pounded, declining 5.18% Thursday and losing 25% of their value in the past month, David Trainer, New Constructs CEO and founder, believes the name is headed to $100 per share.
“A hundred bucks, that’s about right. That’s a single-digit growth for maybe five or 10 more years, and that’s how you get to $100,” Trainer told CNBC’s “Fast Money” on Thursday. “And I think that’s a fair expectation for a company that’s completely boxed in now. They’ve got no competitive edge.”
Citing a broken business model, valuation and reversal in the name’s momentum, Trainer, who holds a short NFLX position, believes the stock has all the catalysts it needs to go to $100 levels. He also argues that Netflix stock is not a good place to invest as its competition grows stronger, including Yahoo (YHOO) and Amazon (AMZN) who have recently jumped into the streaming market, looking to promote their own content services and get an edge on rivals like Apple (AAPL) and Google (GOOG).
A recent explosion of prime competitors into the space is all the more reason for investors to get out of dead money, Trainer said.
“Why pay for a service that has been equated to a public library. A middleman that stores content and streams it over the Internet,” Trainer said. “Why should consumers pay for a service that’s crowded with cheaper content providers? With that said, the glory days are behind it.”
Netflix shares are down $2.43, or 0.73%, at $332.30 in pre-market trading Friday, a substantial decline from the recent all-time high of $458.