Pershing Square Capital Management disclosed a 4.9% stake in Netflix, citing its market leadership and undervaluation.
Netflix (NASDAQ: NFLX) shares jumped 3.52% Thursday morning, extending gains to 4.7% earlier in the session. The rally followed news that Pershing Square Capital Management, led by billionaire Bill Ackman, acquired a 4.9% stake in the company.
Pershing Square, known for concentrated investments, highlighted Netflix’s dominance in streaming and its “substantial discount” valuation. The hedge fund exited its prior Netflix position in early 2022 but now expects double-digit revenue growth and margin expansion. Netflix stock remains 42% below its 2023 peak amid past acquisition struggles and engagement concerns.
The disclosure in Pershing’s quarterly shareholder letter described Netflix as “highly attractive” for its business quality and earnings growth potential. The move signals confidence in the company’s long-term prospects despite recent volatility.