Bill Ackman Returns to Netflix After $400 Million Loss, Takes Positions in Visa and Mastercard

TradingKey
08/13

TradingKey - Billionaire investor Bill Ackman's Pershing Square recently disclosed that the firm initiated a new position in Netflix (NFLX), while also buying Visa (V), Mastercard (MA), S&P Global (SPGI), Intercontinental Exchange (ICE), and Alcon (ALC), adding a total of six companies.

Among them, Netflix was the most watched company among the new additions. As of the end of June, Pershing Square held approximately 3.15 million shares of Netflix, accounting for about 4.9% of its portfolio. This also marks Ackman's return to investing in Netflix after about four years.

Bill Ackman is an American hedge fund manager who founded Pershing Square Capital Management in 2004. Ackman is known for his concentrated portfolio and long-term investments in a few large companies, while also drawing Wall Street's attention for frequently sharing public views on the strategy and management of his portfolio companies. His past notable investments include Chipotle, Canadian Pacific Railway, Hilton, and Google parent Alphabet.

Ackman previously bought heavily into Netflix in 2022. In January of that year, after Netflix's stock price dropped sharply, Pershing Square spent over $1 billion to build a position. However, in April of the same year, after Netflix reported its first subscriber decline in more than a decade, its stock plummeted again. Pershing Square subsequently liquidated all of its Netflix shares, incurring cumulative losses of over $400 million on the investment.

Regarding this new position, Pershing Square stated in its latest letter to shareholders that it believes Netflix has established a leading position in the streaming war. Netflix's global paid subscriber base, advertising business, and profitability have all undergone significant changes compared to 2022. In recent years, the company has also expanded its revenue streams by cracking down on password sharing and introducing an ad-supported tier.

Netflix daily stock price chart, Source: TradingView

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