Billionaire hedge fund manager David Einhorn said in an investor letter on Monday that chipmaker Micron Technology would be worth more than Netflix within the next few years.
Einhorn, whose $12 billion Greenlight Capital funds posted a negative 1.5% return net of fees and expenses in the second quarter, according to the letter, said semiconductor technology was "bright" for the next several years while Netflix had "pushed its promises into the distant future".
"Our long-term outlook is that sometime in the next few years, MU ... will be worth more than NFLX," Einhorn said. Micron's market capitalisation is less than half that of Netflix, at about $19.1 billion, compared with Netflix's $42.9 billion after the close of trading on Monday.
Einhorn expressed surprise that Netflix shares had rallied in the second quarter after the company's first-quarter earnings miss. The company's stock soared 58% during the quarter.
He said that Micron's shares, which fell about 31% in the second quarter, "have fallen too far".
Micron's shares closed up 0.23% on Monday at $17.61, while Netflix was up nearly 4% to end at $707.61.
"In today's market, the best-performing stocks are companies where accountability is in the distant future," Einhorn said, adding that "apparently Red Ink is the New Black."
He also said Greenlight had initiated "small" bullish positions in Applied Materials and Bank of New York Mellon over the quarter. Applied Materials closed up 2.9% at $19.31, while BNY Mellon added 1.6% at $42.38.
Einhorn also said his firm sold its bullish positions in Altice, EMC, Marvell Technology Group, Nokia and Playtech with gains and Conn's at a loss.
In reference to Greece, Einhorn said losses from his firm's small position in Greek bank stocks and warrants were insignificant.
Einhorn said Europe was "unwilling to allow Syriza a face-saving compromise," referring to the Greek ruling party and that Greece's giving in to Europe's demands "might not be enough, as the grand goal of the European negotiators appears to be to discourage other countries from electing populists."
Greece's leftist prime minister Alexi Tsipras faces a showdown today with rebels in his own party, furious at his capitulation to German demands for one of the most sweeping austerity packages ever demanded of a euro zone government.
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