Tesla Inc (NASDAQ: TSLA) and Netflix Inc (NASDAQ: NFLX) may have first-mover benefits in their categories but that’s where the similarities end for the companies, Ark Investment Management analyst Brett Winton wrote in a Twitter post on Tuesday.
What Happened: The Tesla bull analyst was responding to early-stage venture SK Ventures’ co-founder Paul Kedrosky’s view that there are parallels between the two companies and their stocks.
Kedrosky said Tesla had likely reached a peak in 2021 for its market share and margin, given the “gobsmacking” number of EVs being introduced in the market.
“One thing I find amusing about many people caught in the Netflix trade— a first-mover facing rising competition for a flat market — is that they don't see any Tesla parallels,” Kedrosky wrote in a post.
In response, Winton said the parallels do not apply in the electric vehicle industry, especially for Tesla.
“Because Netflix’s competitors could throw money at content and end up with performance competitive product,” the Ark Invest analyst wrote. “Not so in EVs.”
Because Netflix's competitors could throw money at content and end up with performance competitive product
— Brett Winton (@wintonARK) April 20, 2022
Not so in EVs
(and the right way to think about share is share of overall auto sales, not share of EV) pic.twitter.com/0NrUml22ue
Cathie Wood-led Ark Invest had in February diluted all of its exposure in Netflix. The popular money managing firm however counts Tesla as its largest bet.
See Also: 'Woke Mind Virus:' Elon Musk Reacts To 25% Netflix Stock Plunge
Why It Matters: The streaming giant on Tuesday reported a massive subscriber loss of 200,000 users in the first quarter and provided gloomy guidance.
Netflix said it is not growing revenue as fast as it would like to in the near term. The pandemic, it said, clouded the picture by significantly increasing the company’s growth in 2020, which led it to believe that most of the slowdown in 2021 was due to the COVID-19 pull forward.
Price Action: Netflix stock closed 3.2% higher at $348.61 on Tuesday but tumbled over 25% in extended trading.
Photo collage via Priscilla Du Preez and Alexander Shatov on Unsplash
