Tilson said he trimmed positions due to uncertainty ahead of earnings.
Netflix reported earnings per share of 73 cents, beating expectations of 55 cents. Revenue grew to $876 million.
Tilson, a bull who said Netflix could “go crazy to the upside” earlier this month, remained optimistic on the company.
“If they show 30 to 40 percent subscriber growth exiting this year, this stock’s an easy double this year,” he said.
Tilson said he was in the stock for the long-term, preferring more of an 18-month window for it to return to profitability.
“The company said we’re not going to earn any money this year, and we did not expect that,” he said.
Michael Pachter, managing director at Wedbush Securities, took a strong bear position.
“The company was more out of touch than I thought they were before,” he said. “They’re making light of their diminishing content quality.”
Last year, Netflix announced it would lose popular content from Starz after a failure to come to a revenue-sharing agreement. The development, along with a short-lived plan to spin off DVD and streaming businesses, led to significant subscriber losses.
Pachter said he expected losses to increase in the June quarter if Netflix doesn’t raise the prices it charges customers.
“They are making less than $1 per subscriber per month,” he said.
Another major headwind could come in the form of increased competition from Amazon, which offers its Prime streaming service, as well as increasing content-acquisition costs.
“It makes no sense to me that people like this story at all,” he said.
Trader Joe Terranova said he would caution potential buyers on possible raised price targets, which doesn’t necessarily signal a buy.
“If you don’t understand something, you don’t rely on the analysts,” he said. “The analysts are getting Netflix wrong.”
Mike Khuow of Cantor Fitzgerald said the options action provided a tell.
“After January expiration, we started to see a lot of that bullish sentiment dwindle,” he said. “In fact, it’s fallen back basically to the levels it was before the stock had suffered its initial big declines.”
Trader Dan Nathan wasn’t a buyer, noting that the company beat estimates that had been revised downward.
“This is a show-me story,” he said.
Netflix shares traded at $13.27, up 13 percent at 6:50 p.m. ET.
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Trader disclosure: On Jan. 25, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long IBM; Terranova is long SU; Terranova is long SJM; Terranova is long BRCM; Terranova is long MUB; Terranova is long EMC; Terranova is long F; Terranova is long SBUX; Terranova is long V; Terranova is long AXP; Terranova is long APC; Terranova is long OXY; Terranova is long TRLG; Terranova is long JNPR; Terranova is long CSCO; Terranova is long WFM; Terranova is long XOM; Terranova is long UNG April $5 puts; Finerman is long (JPM); Finerman is long (BAC); Finerman is long (PLCM); Finerman is long (IBM); Nathan is long AAPL Jan puts; Nathan is long BAC Jan puts; Nathan is long MS Jan puts; Nathan is long NFLX Jan calls; Nathan is long INTC Jan put spreads; Nathan is long MSFT puts; P. Najarian is long AAPL; P. Najarian is long BAC calls; P. Najarian is long C; P. Najarian is long JPM calls; P. Najarian is long MSFT; P. Najarian is long INTC; P. Najarian is long JCP
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