Who is Bill Ackman? How is Netflix Nosedive Becoming an Agony for His January Decision?

Who is Bill Ackman? How is Netflix Nosedive Becoming an Agony for His January Decision?

Bill Ackman is a billionaire investor who just recently invested in Netflix in January when the company reported a loss in its subscriber growth. Back in January, the streamer’s stock price had suddenly plummeted. And while other investors were worried about losing their money, Ackman decided to gamble and bought the company’s shares through his hedge fund company, Pershing Square Capital Management. The streamer was losing subscribers for quite some time, but despite the lean growth, he began buying up shares in the company on Jan 21. Other than his investors no one knows the amount he has invested or his share percentage. 

The streamer’s shares dropped to 26% in the after-hours trade. Previously in January, they were valued between $351.46 to $409.14. But on Tuesday, the stocks were priced at $257.98. According to the data, Ackman’s investment in the platform means a loss of 26% at the low end or a loss of 37% in the worst case. 

ALSO READ: Wall Street Analysis Estimates a Massive 4% Soar in Netflix’s 2023 Revenue if Password Sharing Charges Are Applied Globally

Bill Ackman knew Netflix would face “near term variability’

Bill Ackman had expected the stock prices of Netflix to drop. Apparently, he had even warned about this his investors. Although he reckons that this is short-term. In the long term, the “undervalued stocks” would produce double-digit annual revenue. Moreover, according to him the per share growth will also increase to 20% a year. 

Before the January report revealed the dismal stock value, the streamer’s values were trading at $500. And Bill had earned high double-digit returns for three years consecutively. Additionally, the fund management saw a 70.2% rise in 2020.

For someone who invests in stocks professionally and moves stock prices around, Bill had incurred huge losses before as well. So this is not the first time that his management is facing such an ordeal. Back in October 2017, his hedge fund management company nursed a loss of $145 million dollars after investing in Chipotle. The fast-food chain company’s share value dropped so low that he made fun of his losses. He joked he and his employees will eat only Chipotle until the value increases to $500. And the prices not only increased but on Tuesday Chipotle shares traded at $1632.03 as compared to Netflix.

ALSO READ: Netflix Is Doing All They Can to Stop Password Sharing, but Is Their Approach Working Against Them?

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