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William Ackman’s Hedge Fund Takes Stake in Netflix

William Ackman’s Hedge Fund Takes Stake in Netflix

Billionaire investor

William Ackman

stated his hedge fund has acquired 3.1 million shares of

Netflix Inc.,

NFLX -1.83%

attracted by a latest selloff of the streaming large’s inventory.

Pershing Sq., the fund, stated it acquired a stake in Netflix as a result of a mix of traders’ destructive response to the streaming firm’s subscriber progress within the fourth quarter and up to date market volatility.

“I’ve lengthy admired

Reed Hastings

and the outstanding firm he and his group have constructed,” Mr. Ackman stated of Netflix’s chairman and co-chief govt in a tweet Wednesday. “We’re delighted that the market has introduced us with this chance,” he wrote. Mr. Ackman was complimentary of the corporate’s enterprise mannequin in a letter included in his tweet and gave no indication that the funding could be an activist place.

Pershing Sq.’s stake equals about 0.68% of the Los Gatos, Calif.-based firm, based mostly on roughly 455.8 million diluted shares excellent at Dec. 31.

Netflix declined to remark.

Extra Netflix viewers watched dubbed variations of the South Korean drama “Squid Sport” than subtitled variations. WSJ met one of many present’s English-language voice actors to see how dubbing overseas content material is fueling the streaming large’s progress. Picture Illustration: Sharon Shi

Shares of Netflix rose 4% in after-hours buying and selling following information of Pershing’s funding. By way of Wednesday’s shut, the inventory was down about 40% for the yr. It closed Wednesday at $359.70, in contrast with a excessive of $691.69 on Nov. 17.

Whereas he made his identify as an outspoken activist at corporations like

Herbalife Vitamin Ltd.

HLF -0.60%

, Mr. Ackman for the previous a number of years hasn’t taken activist positions and as an alternative has targeted on friendlier investments in well-known corporations like

Domino’s Pizza Inc.

DPZ -2.90%

He additionally raised a record-size blank-check automobile that lined up a fancy deal to take a stake in

Common Music Group

UMG 0.07%

earlier than backing off the plan after pushback from regulators. He has since stated he’s exploring different potential offers.

Netflix’s latest inventory decline got here after the corporate stated final week that it missed its subscriber estimate for the fourth quarter, including 8.3 million subscribers as an alternative of the projected 8.5 million. Netflix stated it expects so as to add a a lot smaller variety of subscribers this quarter than it did a yr in the past because it contends with a crowded streaming market and ongoing disruptions from the Covid-19 pandemic.

Netflix earlier this month additionally raised the value for its month-to-month plans for purchasers within the U.S. and Canada, the primary such enhance since 2020. It cited growing programming prices as the first purpose.

Development within the U.S. has slowed for Netflix lately, and it’s focusing a lot of its efforts abroad. It is also wanting in its rearview mirror extra as

Walt Disney Co.

DIS -2.13%

’s Disney+ and different newer streaming providers are competing for subscribers and content material.

Though traders had been disenchanted with Netflix’s latest outcomes and forecast, it’s nonetheless by far the streaming chief with 222 million paid memberships. In 2021, the corporate had $29.7 billion in income and internet revenue of $5.1 billion.

One other well-known activist,

Carl Icahn,

held an enormous Netflix stake for years and made round $2 billion in revenue when he cashed out of it in 2015, making it one in all his finest bets ever. He first took a stake in 2012 on the urging of his son and deliberate to name for the corporate to discover a sale.

However then he met with Mr. Hastings, who organized for a non-public displaying of the soon-to-debut “Home of Playing cards” drama starring Kevin Spacey, the streamer’s first authentic sequence. After seeing it and understanding Mr. Hastings’ imaginative and prescient, Mr. Icahn determined in opposition to the sale thought and deserted his plans for activism.

Write to Denny Jacob at denny.jacob@wsj.com

Copyright ©2022 Dow Jones & Firm, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared within the January 27, 2022, print version as ‘Ackman’s Hedge Fund Acquires Stake in Netflix.’

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