Hedge fund boss loses £300m in Netflix sale: Bill Ackman dumps stake as subscribers quit the streaming service in their droves
A billionaire investor has dumped his shares in Netflix as subscribers quit the streaming service in their droves.
In another blow to the California-based company, hedge fund tycoon Bill Ackman sold the stake he bought just three months ago, racking up a £300million loss in the process.
The 55-year-old founder of Pershing Square said he has ‘lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty’.
Cutting his losses: Hedge fund tycoon Bill Ackman (pictured) sold the Netflix stake he bought just three months ago, racking up a £300m loss in the process
The move came just days after Netflix revealed it lost 200,000 paying users in the first three months of the year and expected another 2m to quit between April and June.
The bleak figures suggested the streaming service has run into a brick wall after a decade of meteoric growth – sending shares down 35 per cent on Wednesday and another 4.5 per cent yesterday.
The decision to bail out marked a significant U-turn for Ackman, who in January declared he was ‘all-in on streaming’ when he bought 3.1million shares for around £850million.
Announcing his change of heart yesterday, Ackman said: ‘We require a high degree of predictability in the businesses in which we invest.
‘While Netflix’s business is fundamentally simple to understand, in light of recent events we have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty.’
AJ Bell investment director Russ Mould said Ackman’s decision looked to be ‘pragmatic’.
He said: ‘He had a thesis, that thesis has been challenged and he has accepted he was wrong.
‘And like the very best money managers he has been quick to accept he was wrong and moved to cut a loser rather than hang on and just hope for the best. Run your winners, cut your losers.’