Bill Ackman may have lost $400 million on paper with Netflix Stock Bet

  • Bill Ackman’s Pershing Square could lose $400 million after buying Netflix stock in January.
  • The hedge fund’s stake, valued at $1.1 billion three months ago, is now worth around $700 million.
  • Netflix expects its global paid subscriber base to decline by 2 million users this quarter.

Bill Ackman has potentially racked up a $400 million unrealized loss on the Netflix bet he made just three months ago.

netflix

shares fell 37% on Wednesday, after the video-


Diffusion

The service reported slowing revenue growth last quarter and forecast its subscriber base to decline from 2 million users to less than 220 million this quarter.

Ackman’s Pershing Square bought about 3.1 million shares of Netflix in just four trading days in late January, securing a 0.7% stake worth $1.1 billion at the time. The media headline’s latest plunge reduced the value of the hedge fund’s position to around $700 million today, down about 36%.

Pershing Square began buying Netflix shares on January 21, the day the stock fell 25% on a weak subscriber growth forecast, alongside a broader sell-off in tech stocks amid the surge inflation and rising interest rates.

Ackman, who typically invests in real-world companies such as Chipotle and Domino’s Pizza, explained the bet by noting that he’s been a longtime admirer of Netflix co-CEO Reed Hastings and his company. The billionaire investor also touted Netflix’s subscription model, management team, pricing power, large and diverse content library, exceptional user experience and strong presence in the growing streaming industry. .

Additionally, Acman tweeted in January that he was “delighted” to finally have the opportunity to invest in Netflix at an attractive valuation. If his investment record hasn’t changed, he could see Netflix stock as an even bigger bargain after its latest plunge.

Pershing Square declined to comment.

Shares of Netflix peaked north of $700 in November. They have fallen 69% since then and have fallen more than 63% this year alone.

During Netflix’s earnings call, Hastings and his team blamed the company’s slowing growth on account sharing and fierce competition from newer services like Disney Plus and


HBO Max

. They are exploring rolling out a cheaper, ad-supported pricing tier to revitalize growth, they said.

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