Pershing Square Discloses New Netflix Stake, Years After $400M Loss

Bill Ackman's Pershing Square has taken a new stake in Netflix Inc. (NFLX), marking a significant return to the streaming giant after a costly exit in 2022. According to recent regulatory filings, the hedge fund held 3.15 million shares as of June 30, a position representing 4.9% of its portfolio.

A Second Look at a Former Holding

This new investment follows Pershing Square's previous, short-lived venture into Netflix. In early 2022, the fund invested over $1 billion in the company, only to sell the entire stake just a few months later, incurring a loss of more than $400 million.

The current landscape for Netflix is markedly different. The stock was trading at $74.21 as of August 12, down 38.4% over the past year. This has brought the company's valuation to what the source material describes as its lowest level in years, with a trailing price-to-earnings (P/E) ratio of 22.6x.

The Bull Case for Netflix

Ackman's re-entry suggests a belief that the market is overlooking key catalysts for growth and value creation. The investment thesis appears to be built on several factors that have evolved since Pershing's last investment:

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• Margin Expansion: Netflix is targeting an operating margin of 31.5% for 2026, a significant increase from approximately 25% two years prior, driven by operating leverage in its scaled business.
• Advertising Growth: The company's ad-supported tier is gaining traction, with ad revenue projected to double to $3 billion by 2026. The source notes that 55% of new subscribers are opting for the ad-supported plan.
• New Revenue Streams: Expansion into gaming and live content is increasing the company's total addressable market. Monthly active gaming players have reportedly surged since late 2025.
• Capital Returns: Netflix has been aggressively returning capital to shareholders, executing a record $4.7 billion share repurchase in the second quarter of 2026 and holding a remaining authorization of $27 billion.

Persistent Market Headwinds

Despite these positive developments, investor skepticism remains. Revenue growth is decelerating, with full-year 2026 guidance at 13–14%, down from 16% in the last twelve months. The source also highlights that 21 analysts have recently revised their earnings estimates downward.

Furthermore, the competitive environment is intensifying as the "streaming wars" evolve. Deep-pocketed rivals like Disney, Amazon, and Apple continue to invest heavily in content, while potential industry consolidation, such as a rumored bid for Roku by Fox, could alter the landscape. Ackman's bet is that Netflix's strong free cash flow, expanding margins, and new growth drivers will outweigh these concerns, positioning the company as a mispriced winner.