Pershing Square Fund Acquires 3.1 Million Shares of Netflix

William Ackman, a billionaire investor, has said his hedge fund Pershing Square has acquired 3.1 million shares of Netflix stock, The Wall Street Journal reports.

The move came after a stock selloff recently for the streaming giant.

Pershing Square said it bought the stake because of investors’ negative reaction to the company’s subscriber growth in the fourth quarter, as well as recent market volatility.

The company’s stake now equals around 0.68% of the company.

Netflix saw a drop in stocks because the company said it had missed a subscriber estimate for the fourth quarter. It only added 8.3 million subscribers as opposed to 8.5 million.

This quarter, Netflix says it will likely attract fewer subscribers because of a more crowded streaming marketplace, along with more COVID-related complications.

In a tweet Wednesday (Jan. 26), Ackman said he has “long admired Reed Hastings and the remarkable company he and his team have built.”

“We are delighted that the market has presented us with this opportunity,” he wrote. Mr. Ackman was complimentary of the company’s business model in a letter included in his tweet and gave no indication that the investment would be an activist position.”

Ackman originally became known as an outspoken activist with companies like Herbalife. Recently he has focused on “friendlier” investments like Domino’s Pizza. He’s also started a record-sized blank check vehicle, which had lined up a deal to take a stake in Universal Music Group, though it backed off that plan because of regulatory concerns.

PYMNTS wrote recently that Netflix was seeing strains on its streaming growth, with the company bleeding subscribers because of a much more varied landscape.

See more: New Streaming Dynamics Threaten Netflix, Subscriber Growth

This is a change even from not too long ago, when it was undisputedly the leader in streaming services.

The company now faces more competition in the form of several big Hollywood names including Disney, Paramount and Universal, among others.