Netflix Stock Jumps As Billionaire Hedge Fund Manager Bill Ackman Reveals Stake In Streamer

deadline.com:

Netflix rose handily in after-hours trading Wednesday following news that Bill Ackman’s Pershing Square Capital has acquired more than 3.1 million shares to become a top-20 stockholder.He bought on a big dip.

The streamer’s stock has been killed since its fourth-quarter earnings report last week, and amid a series of broad market selloffs tied to interest rate jitters.

Investors reacted negatively to Q4 subscriber growth and management guidance. In Pershing Square’s letter to shareholders today, Ackman called that an “opportunity to acquire Netflix at an attractive valuation.” The shares closed down 1.8% but reversed course after hours, up nearly 5%.“We have greatly admired Netflix both as consumers and as investors, but have never previously owned a stake in the company,” he said, calling the platform founded by Reed Hastings “a primary beneficiary of the growth in streaming and the decline in linear TV driven by its superior customer experience, a vast and diverse amount of superb, constantly refreshed content, global improvements in bandwidth, and the proliferation and continuous improvement and convenience of devices on which one can watch.”He said Pershing acquired the shares starting on Friday and over the last several days.The letter laid out why he likes Netflix:-“Subscription-based, highly recurring revenues, which have enormous future growth potential”-“A truly best-in-class management team and unique high-performance culture”-“Economies of scale and superb quality in its industry-leading content, which should continue to drive future growth and widen the company’s powerful competitive moat”-“Pricing power derived from the enormous value it delivers to consumers compared with other alternatives”-“Substantial