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Hedge Fund Billionaire Bill Ackman announced on Wednesday that he had dumped his 3.1 million shares of woke Netflix and said that he no longer has confidence that Netflix is the streaming entertainment leader.

Ackman’s announcement comes on the heels of a 40 percent drop in Netflix shares on Wednesday, after the company announced that it had lost 200,000 subscribers for the first time.

Per Breitbart News:

His fund Pershing Square Capital Management is taking a sizable loss on its $1.1 billion investment — various reports put the loss at more than $400 million. Ackman said “recent events” have clouded the steamer’s outlook.

“While Netflix’s business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty,” he wrote in a letter to investors obtained by multiple news outlets.

He said Netflix’s efforts to seek new revenue streams — including an ad-supported version of its service — “are sensible,” but it remains “extremely difficult to predict their impact on the company’s long-term subscriber growth, future revenues, operating margins and capital intensity.”

Since Pershing only invests in a relatively small number of companies, the fund is looking for a “high degree of predictability” in its portfolio.

Pershing purchased 3.1 million shares of Netflix in January in the wake of the streamer’s disappointing fourth-quarter results. The resulting sell-off at the time presented a “compelling” buying opportunity, Ackman said. But instead of rebounding, the stock has only continued to decline.

This is a big blow to Netflix, for sure.

Shares of Netflix continued their decline on Thursday, losing another 3 percent in morning trading.

Follow Warner Todd Huston on Facebook at: facebook.com/Warner.Todd.Huston, or Truth Social @WarnerToddHuston

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Warner Todd Huston

Warner Todd Huston has been writing editorials and news since 2001 but started his writing career penning articles about U.S. history back in the early 1990s. Huston has appeared on Fox News, Fox Business Network, CNN, and several local Chicago News programs to discuss the issues of the day. Additionally, he is a regular guest on radio programs from coast to coast. Huston has also been a Breitbart News contributor since 2009. Warner works out of the Chicago area, a place he calls a "target rich environment" for political news.

 

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