Overview
- Pershing Square disclosed a new 3.15 million-share Netflix position that represents about 4.9% of the fund in a filing published in mid-August 2026.
- In a mid-2026 investor letter, the firm wrote that "Netflix has since effectively won the streaming wars" and cited the company’s more than 325 million paid subscribers and recent momentum.
- Netflix reported second-quarter revenue of $12.56 billion, up 13.37% year-over-year, which Pershing Square says supports a value entry as the stock trades near multi-year cheapness.
- Ackman’s thesis relies on heavy cash generation—third-party analysis puts Netflix’s earnings-to-free-cash conversion near 90%—plus large buybacks and an ad-supported tier the company expects will reach about $3 billion by the end of 2026.
- Key risks include growing ad revenue at the pace promised, stabilizing viewer engagement after soft watch-time trends, and reduced visibility because Netflix no longer reports quarterly subscriber counts.