What you need to know
- Bill Ackman says his firm bought 3.1 million Netflix shares.
- It's thought the deal was worth around $1.1 billion.
Pershing Square Capital Management founder Bill Ackman says his firm bought 3.1 million Netflix shares which equated to around $1.1 billion at the time.
The move came as Netflix shares were reeling following poor market reaction to the company's recent quarterly subscriber growth numbers, making it the perfect time to buy. While shares were previously down, the buy saw them rebound during after-hours trading before settling 5% up.
Ackman told investors that the opportunity to buy Netflix shares at their reduced price was too good a chance to miss, according to a report by The Hollywood Reporter.
"The opportunity to acquire Netflix at an attractive valuation emerged when investors reacted negatively to the recent quarter's subscriber growth and management's short-term guidance. Netflix's substantial stock price decline was further exacerbated by recent market volatility," Ackman wrote in his letter. "We are pleased to add Netflix to our portfolio. Many of our best investments have emerged when other investors whose time horizons are short term, discard great companies at prices that look extraordinarily attractive when one has a long-term horizon."
Netflix recently announced price increases which mean that a 4K Premium plan now costs $19.99 per month. Amazingly, Netflix still offers a plan that will get you DVDs sent in the mail according to its support pages.
Priced at $19.99 per month, Netflix now costs four times as much as Apple TV+ and while the libraries can't really be compared at this point, there is no denying Apple's streaming service is exceptional value. The same can surely be said for Disney + as well.
