Key Facts on Bill Ackman’s Netflix Investment
Bill Ackman’s hedge fund, Pershing Square Capital Management, acquired 13.1 million shares of Netflix (NASDAQ: NFLX) during the second quarter of 2023, representing less than 5% of its portfolio. This move follows a previous investment in early 2022, where Ackman sold 31.1 million shares after a three-month hold, incurring a $400 million loss. Netflix’s stock is currently trading 42% below its peak as of August 14, 2023.
Despite its recent struggles with subscriber growth and mounting competition, Netflix reported over 325 million subscribers and is projected to achieve $51.2 billion in revenue by 2026. Ackman’s investment thesis cites Netflix’s strong profitability driven by a favorable scale advantage, alongside expectations of a 19% annualized growth in earnings per share over the next three to five years. However, analysts forecast a deceleration in revenue growth, with a compound annual increase of 11.6% from 2025 to 2028.
As the competitive landscape for streaming continues to intensify, including challenges from social media platforms, analysts warn that Netflix may face increased pressure to maintain its market position and subscriber base.
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