Bill Ackman’s Pershing Square is back in Netflix, four years after one of its most public losses. The hedge fund disclosed a new 3.15 million-share position in the streaming giant, according to a semiannual report released Wednesday.
The move marks a full reversal from 2022, when Pershing Square invested over $1 billion in Netflix, only to sell months later at a loss of more than $400 million. The exit came after Netflix reported its first subscriber decline in decades.
Pershing Square said the situation at Netflix has changed. “Netflix has since effectively won the streaming wars,” the fund stated in its report.
The firm expects Netflix to grow revenue at a double-digit rate going forward. It also believes content costs will grow more slowly than revenue, which should push profit margins higher.
Pershing Square added that Netflix’s current valuation “represents a substantial discount,” suggesting it sees the stock as underpriced relative to its business quality.
Netflix shares fell 20.85% year-to-date and closed at $74.21 on Wednesday, down 0.78% on the day. The stock was up 1.32% in overnight trading.
Netflix was not the only new addition to the portfolio. Pershing Square also disclosed new stakes in Visa, Mastercard, S&P Global, Intercontinental Exchange, and Alcon.
The positions in Alcon and Intercontinental Exchange were acquired after June 30, meaning they came in the second half of the year.
Despite the new additions, the fund’s top holdings remain unchanged. Microsoft holds the top spot with 1.52 million shares, making up 12.4% of the portfolio.
Uber sits in second place with 7.63 million shares, accounting for 12% of the fund. Meta Platforms holds the third position with 913,501 shares.
This report is also the first since Pershing Square’s U.S. entity began trading on the New York Stock Exchange in late April. The fund reported net returns of 0.6% from its listing date through August 11.
Ackman has not commented publicly beyond the fund’s written statement. The new Netflix position places a bet that the company’s recent growth is durable and that the market has not fully priced it in.
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