Ackman's $1B Netflix Bet
Pershing Square takes 3.15 million shares, predicting 20% annual earnings growth for the streaming giant
Bill Ackman's Pershing Square has taken a new stake in Netflix, acquiring 3.15 million shares, equivalent to 4.9% of the firm's portfolio. This move is part of a larger overhaul of Ackman's portfolio, which also includes new positions in Visa, Mastercard, S&P Global, Intercontinental Exchange, and Alcon.
Ackman believes Netflix is poised for strong growth, citing its ability to outspend rivals on content while spreading the cost across its massive user base of over 325 million subscribers. This subscriber base is nearly double the combined total of its closest competitors, Disney+ and HBO Max.
Pershing Square expects Netflix revenue to compound at a double-digit rate, while content costs rise more slowly, resulting in earnings growth of close to 20% annually. This prediction is significant, given that Netflix shares have fallen roughly 50% from their June 2025 high of $134, cutting the stock's valuation to about 21 times forward earnings from more than 40 times.
## Why it matters The stakes are high for Ackman's Pershing Square, which has faced recent challenges. Through July, Pershing Square USA was down 3.5% for the year, and London-listed Pershing Square Holdings was down 9.2%, compared with a 13% gain for the S&P 500. Ackman's portfolio overhaul, including the addition of Netflix and five other companies, is a significant bet on the potential for strong earnings growth.
Ackman's investment strategy is centered on the belief that earnings growth is the main driver of long-term investment value. With the addition of these six new companies, Pershing Square's portfolio now includes a range of major players in the tech, finance, and healthcare sectors, including Uber Technologies, Meta Platforms, Amazon, Fannie Mae, Freddie Mac, and Microsoft.
## What happens next As Ackman's Pershing Square navigates the challenges of the current market, the success of its new investments will be closely watched. With its significant stake in Netflix and its predictions of strong earnings growth, Pershing Square is betting big on the streaming giant's ability to outperform its rivals and deliver strong returns for investors.
