Bill Ackman

Film streaming company had said it lost 200000 subscribers in the first three months of the year.

The streaming service has now seen its market value decline by $160 billion (£122 billion) since the start of the year. Netflix saw $47 billion (£36 billion) wiped off its value in the opening minutes of trading in New York on Wednesday as it warned that it could lose another 2.5 million subscribers this year. Netflix has pledged to introduce a cheaper ad-funded subscription tier and crackdown on account sharing in a bid to restart growth.

Bill Ackman's Pershing Square sold its 3.1 million Netflix shares, resulting in about a $400 million loss on the investment.

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. That said, we believe the dispersion of outcomes has widened to a sufficiently large extent that it is challenging for the company to meet our requirements for a core holding. While we believe these business model changes are sensible, it is extremely difficult to predict their impact on the company’s long-term subscriber growth, future revenues, operating margins, and capital intensity. We require a high degree of predictability in the businesses in which we invest due to the highly concentrated nature of our portfolio. “Based on management’s track record, we would not be surprised to see Netflix continue to be a highly successful company and an excellent investment from its current market value,” Ackman concluded in the letter. In our original analysis, we viewed this operating leverage favorably due to our long-term growth expectations for the company.

Netflix Inc shares tumbled 35 per cent yesterday, making it the worst performer in the S&P 500 this year.

It’s considering offering an ad-supported version while also cracking down on customers who share their passwords with friends and family, both signs the easy days of subscriber growth are behind it. Netflix isn’t the first big loss for the billionaire investor. With Wednesday’s plunge, the stock is now down 62 per cent this year. His holdings in the company would have been worth about US$700 million as of Wednesday’s close. Netflix shares tumbled 35 per cent to US$226.19 at the close in New York, making it the worst performer in the S&P 500 this year. Article content

Hedge fund guru Bill Ackman has lost $400m selling Netflix shares. John Stepek explains why this was a brilliant trade, and outlines three things that you ...

The company might be able to make that work, but the point is, by shifting to that model, it will become a very different company to the one that Ackman, three months ago, viewed as such a compelling “long-term” bet. In short, you need to make sure that you aren’t betting your house on being right, because chances are, you’re not. That’s almost impossible to do if the scale of the loss you’d take would ruin you. You need to make sure that your portfolio is diverse enough and that you aren’t staking too much on any one position. It’s worth reading the book, but the short answer is that in situations like this one – where a stock you own suddenly plunged by 25% in a day – successful investors did one of two things. They had their rationale in mind, so when they revisited the trade, they knew whether anything material had changed or not, and if it had, they could take that into account when deciding whether to sell or buy more. Write it down so the cold truth is staring back at you in black and white when it comes to rethink your investment. Do your research to work out why you’re buying before you do so. It’s that you need to do your homework before you buy in the first place. So you need to cultivate sufficient humility to be able to accept that. I will be the first to admit that it’s only human to find it at least mildly amusing when someone with Ackman’s reputation apparently screws up like this, particularly when they’ve made a big deal about short-term versus long-term investing. In fact, you will get lots of things wrong.

Netflix Inc. shares undefined slid another 4% premarket Thursday, continuing the rout that was sparked by its weaker-than-expected first-quarter earnings...

The stock slid 35.1% Wednesday to mark its steepest single-day percentage decline since it fell a record 40.9% on Oct. 15, 2004. Netflix avoided closing with a market value below $100 billion but it still shed a stunning $54.3 billion in market capitalization on the day, according to Dow Jones Market Data. David Trainer, CEO of New Constructs, an independent equity research firm that uses machine learning and natural language processing to parse corporate filings and model economic earning, said the stock could fall another 50%. "Strong competition is taking market share, limiting pricing power and making it clear that Netflix cannot generate anything close to the growth and profits implied by the current stock price," he wrote Netflix Inc. shares

Photo by Bryan Bedder/Getty Images for The New York Times ) Top Netflix shareholder Bill Ackman has sold his stake in the world's largest streaming.

However, his selling of the stock implies that he is taking short-term view, which is estimated to have cost Pershing $400m and counting. “One must wonder if he might buy more of the company as he takes a longer-term view of its opportunities.” “That said, we believe the dispersion of outcomes has widened to a sufficiently large extent that it is challenging for the company to meet our requirements for a core holding.”

(Bloomberg) -- Bill Ackman ditched his stake in Netflix Inc. after losing more than $430 million on his investment in less than three months.

He said he will redeploy the money from the Netflix stake sale to other opportunities. With Wednesday’s plunge, the stock is now down 62 per cent this year. His holdings in the company would have been worth about $700m as of Wednesday’s close.

Netflix shares extended their two-day slump Thursday, following the stock's biggest single-day decline in early two decades, after billionaire investors ...

"One of our learnings from past mistakes is to act promptly when we discover new information about an investment that is inconsistent with our original thesis," he added. Netflix's first quarter earnings were essentially solid, with a bottom line of $3.53 per share that came in firmly ahead of the Street consensus forecast of $2.89 per share and group revenues that were 10% higher than last year, at $7.87 billion, and just behind analysts' estimates of a $7.93 billion tally. Ackman, who began amassing shares in late January following Netflix's disappointing fourth quarter earnings, said late Wednesday that he's liquidated his entire $1.1 billion position, and is taking a $400 million loss, following the group's revelation that it had shed 200,000 subscribers over the the first three months of the year and expects to lose another 2 million by the end of the second quarter.

Ackman invested $1.1 billion in Netflix in January shortly after its shares fell due to a weaker-than-expected subscription forecast. In its earnings report ...

Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. Ackman invested $1.1 billion in Netflix in January shortly after its shares fell due to a weaker-than-expected subscription forecast. - Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. In its earnings report this week, Netflix reported a decline of 200,000 in the number of paid subscribers, urging the billionaire investor to make a U-turn and sell his stake. Earlier this week, Netflix reported a drop in the number of global paid subscribers for the first time in ten years, sending the company’s shares declining by 35% to $226.19 per share.

Ackman became one the streaming company's 20 largest shareholders this year in a bet that lost over $430 million in less than three months. Pershing Square said ...

Bill Ackman's Pershing Square has lost around $400 million or more as it dumps its entire Netflix stake. The hedge fund bought about 3.1 million Netflix ...

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Bill Ackman yesterday announced his New York-based Pershing Square Capital Management was parting with the investment due to the firm's 'unpredictable' ...

When Netflix first U-turned from DVD-rental to home streaming the company had very few competitors, but has seen a flurry of competition grow in recent years. However, one of the group's biggest competitors is also the desire from customers to spend any time away from screens. Netflix also continues to face competition from Amazon, which acquired James Bond studio MGM last month in an 8.5 billion dollar (£6.5 billion) deal to build a library of content for subscribers. Netflix predicted that another two million users will leave in the three months to July. Netflix said the challenging economic backdrop, war in Ukraine, slowing rollout of broadband in some countries and the large number of subscribers sharing their account details with non-paying households have all contributed to the decline. It will also hope that the return of top performing series - such as Stranger Things next month - will halt customers thinking about axing their subscriptions. at a time when the firm is raising prices across the board to generate enough cash flow (which is currently negative) to maintain an entertaining line-up of shows'. The company could also clamp down on customers sharing their accounts with other households. The company said its profits dropped 6% over the latest quarter and the downbeat outlook could suggest an even sharper profit decline could be on the cards. Experts at Kantar said earlier this week that around 1.5 million subscriptions have been axed in the UK since the start of 2022. As customer spending comes under pressure, the group faces increased demand for high quality content in order to justify people's subscription fees. Netflix is losing billions of dollars a year because of illegal password-sharing 'marketplaces' that offer access for just $1, experts have claimed.

Bill Ackman of Pershing Square Capital Management is $400 million poorer after selling the 3.1 million shares of Netflix that he bought in January.

That is why we did so here,” he wrote. In a separate letter to investors, Ackman declared that Pershing was “all in on streaming as we love the business models, the industry contexts, and the management teams…” “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 note to Pershing shareholders. At the time Ackman made his bet on Netflix, the company’s stock was selling at $375 per share — well below its all-time high of $690 per share in October of last year. Shares of Netflix nosedived by 35% on Wednesday after the streaming service announced that it had shed some 200,000 subscribers in the first quarter of 2022. The head of Pershing Square Capital Management is $400 million poorer after selling the 3.1 million shares of Netflix that he bought for $1.1 billion in January.

Hedge fund guru Bill Ackman has lost $400m selling Netflix shares. John Stepek explains why this was a brilliant trade, and outlines three things that you ...

The company might be able to make that work, but the point is, by shifting to that model, it will become a very different company to the one that Ackman, three months ago, viewed as such a compelling “long-term” bet. In short, you need to make sure that you aren’t betting your house on being right, because chances are, you’re not. That’s almost impossible to do if the scale of the loss you’d take would ruin you. You need to make sure that your portfolio is diverse enough and that you aren’t staking too much on any one position. It’s worth reading the book, but the short answer is that in situations like this one – where a stock you own suddenly plunged by 25% in a day – successful investors did one of two things. They had their rationale in mind, so when they revisited the trade, they knew whether anything material had changed or not, and if it had, they could take that into account when deciding whether to sell or buy more. Write it down so the cold truth is staring back at you in black and white when it comes to rethink your investment. Do your research to work out why you’re buying before you do so. It’s that you need to do your homework before you buy in the first place. So you need to cultivate sufficient humility to be able to accept that. I will be the first to admit that it’s only human to find it at least mildly amusing when someone with Ackman’s reputation apparently screws up like this, particularly when they’ve made a big deal about short-term versus long-term investing. In fact, you will get lots of things wrong.