Bill Ackman Put 4.9% of Pershing Square USA Into the Netflix Trade That Cost Him $400 Million in 2022

Bill Ackman's Pershing Square has taken a 3.15 million-share position in NFLX, allocating 4.9% of the Pershing Square USA portfolio to the streaming giant. The move marks a dramatic reversal for Ackman, who lost more than $400 million on the stock in 2022.

The hedge fund manager is betting on a different company this time. NFLX now trades at 25 times earnings, down from the higher multiples Ackman paid previously. The streamer has strengthened its business model with an ad-supported tier expected to generate approximately $3 billion in revenue and an expanded subscriber base exceeding 325 million.

The core investment thesis hinges on improved operating margins and revenue diversification through advertising. But the position carries clear downside risk: NFLX management has guided for revenue growth to decelerate from 16.2% to 11.7%, raising questions about whether the company can maintain its premium valuation as expansion slows.