Amazon never seems to be able to generate profits, yet the investing public continues to be amazingly tolerant, said Paul Isaac, founder of the $900 million hedge fund Arbiter Partners.
"People are looking for growth, and they see revenue growth. They buy into the idea of eventual profitability. But I'm not so convinced," he told CNBC's "Squawk Box" on Tuesday.
Amazon falls into a category of "growth model 4.0" companies that "theoretically are going to grow into great profitability," Isaac argued, saying, in the meantime, they're "funded through a combination of negative working capital dynamics [and] stock-based compensation."