Billionaire William Ackman is showing the least interest in Netflix following the platform lost about 2 lakh subscribers and simultaneously is valued 25 percent less now. He has liquidated his investment by selling shares worth $1.1 billion bearing a loss of over $400 million.
The American investor had bought 3.1 million shares of Netflix just three months ago and his hedge fund company now takes a U-turn after the shares tumbled about 35 percent, reports Reuters.
Netflix has lost a good strength of subscribers for the first time in the past 10 or more years and this forced the Pershing Square Capital Management company to turn back even though Netflix was well praised just a couple of years ago by Ackman.
Ackman released a statement saying the company is currently unpredictable due to the new proposed model that includes accommodating non-paying customers and incorporating advertisements.
His hedge fund tends to buy shares of companies that are highly predictable and the U-turn simply means it cannot wait for the streaming TV pioneer to improve in months of time. It simply locked the losses that are assumed to be over $400 million.
Meanwhile, Netflix is blaming the Russia-Ukraine war for the losses as it has suspended services in Russia, It lost about 200,000 subscribers between January and March this year. This has led to a shortage in the predictions of adding 2.5 million subscribers.
It is projected a further drop in subscribers may be witnessed in the next few months. With a 35 percent drop in shares value, Netflix is now the worst performer in the American S&P 500. Ackman was one of the twenty largest shareholders of the company this year and he bought the shares when concerns were hovering about the subscriber base. He disclosed his Netflix stake on January 26.
Netflix shares were up during the COVID-19 pandemic and were at its peak in November 2020.