Bill Ackman (right) sold his entire Netflix holding for a loss of more than $400 million|Senate Democrats; Stockcatalog|CC BY 2.0
Three months after picking up Netflix’s shares worth more than $1 billion, New York-based hedge fund billionaire Bill Ackman sold his entire holding—eating a loss of close to $430 billion.
Ackman bought the shares in January despite predictions of Netflix’s declining subscription numbers. The billionaire was confident about his investment, saying it would be an “attractive” opportunity for his Pershing Square fund.
But Ackman’s confidence seemed to dissipate when Netflix’s shares plunged more than 35%—following the streaming service’s announcement of losing 200,000 subscribers and its likely guess of losing two million more.
The loss of subscribers wiped more than $50bn off the firm's market value.
Will Netflix rise from its ashes?
Netflix likely has some strategies up its sleeve to increase subscription levels by introducing a cheaper plan featuring ads. The streaming giant is also planning a global crackdown to reduce the practice of password sharing.
However, Ackman noted that Netflix’s changes could take at least one to two years to implement.
