- Bill Ackman’s Pershing Square has lost around $400 million or more as it dropped its entire Netflix stake.
- The hedge fund bought around 3.1 million Netflix shares in late January.
- Netflix’s stock price plummeted 35% after it was announced the company lost 200,000 subscribers in the first quarter.
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Billionaire investor Bill Ackman’s Pershing Square Capital Management has sold its entire stake in Netflix after the streaming company’s share price plummeted 35% on Wednesday on news of massive subscriber losses.
Pershing Square is likely to have lost in the region of $400 million or more on its investment, Insider reported Wednesday. Bloomberg estimates the loss at around $435 million.
“While Netflix’s business is fundamentally easy to understand, in light of recent events we have lost confidence in our ability to predict with reasonable certainty the future prospects of the company,” Pershing Square said in a letter signed by Ackman to investors. CEO and portfolio manager of the hedge fund.
Ackman announced a purchase of approximately 3.1 million Netflix shares end of January, secures a 0.7% stake in the streaming company, making Pershing Square one of its top 20 shareholders. With Netflix’s share price plummeting, the investor would lose about $400 million on paper.
Pershing Square did not immediately respond to Insider’s request for comment outside of normal business hours.
— Bill Ackman (@BillAckman) January 26, 2022
Netflix’s stock price rose when the 2020 pandemic first hit, as viewers stuck at home increased their viewing habits. But his fortunes began to dwindle as the world reopened amid increased competition from a slew of streaming services including Disney+ and HBO Max.
On Tuesday, Netflix said it lost 200,000 subscribers in the first quarter — the streaming service’s first drop since 2011. The company forecast the loss of another 2 million subscribers in the current second quarter and said revenue isn’t growing anytime soon , as it would wish for in the short term.
Netflix’s stock price peaked in November 2021 and is down about 62% year-to-date.