Investor pulls $1.1 billion out of Netflix after losing $400 million on shares
A billionaire investor has dramatically pulled his cash out of Netflix following a plunge in the streaming service’s share price.
Netflix stocks took a nosedive this week after the company admitted losing 200,000 global subscribers – it’s first decrease in a decade.
Now billionaire investor Bill Ackman has liquidated the 3.1 million shares he held in the company just three months after buying them.
Ackman’s company, New York-based Pershing Square Capital Management, took a $400 million hit when Netflix share price collapsed.
And now it says it is parting with the $1.1 billion (£843 million) investment due to Netflix’s ‘unpredictable’ future.
Ackman told CNBC’s Scott Wapner on Thursday morning that, ‘I’m 100 percent ready to admit when I’m wrong and 100 percent ready to admit when I’m wrong, quickly’
‘It’s a great company run by a great management team at a time when there’s a degree of uncertainty that doesn’t make it fit in the Pershing Square portfolio.’
In total, Netflix lost $50 billion of value as the market digested the news of its exodus of subscribers.
CEO Reed Hastings laid out some of the plans the company has to try and mitigate the damage in an earnings call with investors.
These included introducing a cheaper ad-supported Netflix subscription tier and cracking down on people who share their login passwords.
The loss in subscribers could be due to the end of the pandemic-fuelled streaming boom as households axed video subscriptions in record numbers at the start of the year.
To add to this, the rise in living costs has prompted more than 1.5 million British households to cancel accounts on streaming services during the first three months citing ‘money saving’.
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