Bill Ackman’s Stake in Netflix
Bill Ackman’s Pershing Square Capital Management has acquired a 4.9% stake in Netflix (NASDAQ: NFLX), according to a quarterly shareholder letter released on Thursday. This investment comes as Netflix’s stock has declined 42% from its peak last year, yet the company is expected to achieve double-digit revenue growth while content costs grow more slowly, contributing to continuing margin expansion. Netflix shares saw a jump of 4.7% shortly after the announcement, trading up 3.52% by 11:30 AM ET.
Pershing Square highlighted that Netflix has effectively “won the streaming wars” since Ackman’s previous exit from the company in early 2022, and described the current valuation as a “substantial discount.” Netflix is on track to earn over $3 billion in revenue from its new lower-cost advertising tier, and shares are currently priced at 24 times earnings, significantly below its three-year average of 43 times.
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