Bill Ackman Put 4.9% of Pershing Square USA Into the Netflix Trade That Cost Him $400 Million in 2022

Pershing Square USA disclosed a 3.15M-share Netflix stake (~4.9% of its portfolio) after previously buying >$1B in early 2022 and exiting in April 2022 at a loss of >$400M. Netflix reported Q2 revenue up 13.4% to $12.6B with a 33.4% operating margin and guided to 11.7% YoY revenue growth in Q3, alongside expectations for operating margin to rise to 31.5% for 2026 and ad revenue to roughly double to ~$3B. Shares rose >5% on the filing, but the stock remains down ~38% from its 52-week high amid decelerating growth.

Analysis

Pershing’s re-entry is more useful as a read-through on durability than as a pure sentiment signal. The market is being told that the business has crossed from “platform experimentation” to a more predictable cash machine, which matters because the valuation gap is now driven less by narrative and more by earnings revision momentum. That keeps NFLX the cleanest large-cap beneficiary in media, while DIS and other legacy owners face the opposite problem: heavier fixed-cost structures, weaker pricing power, and slower monetization of attention.

The risk is that investors mistake a cheaper multiple for a margin of safety. If top-line growth slips into the high single digits, the stock can de-rate faster than operating profit can grow, especially if ad monetization is still small relative to the core subscriber engine. The next 1-3 months matter most around guidance and ad commentary; the 6-18 month thesis depends on whether engagement and pricing can offset saturation without forcing content spend back up. Falsifiers: a sub-11% revenue guide, margin slippage, or signs that ad growth is decelerating before it scales.

The contrarian view is that the market may already be paying for “quality compounding” while still underestimating how sensitive the stock is to any slowdown in revision breadth. If the next print is clean, the right setup is not chasing the breakout but buying dips into post-earnings volatility. Relative value looks better than outright here: the best expression is long NFLX versus short DIS, where any streaming optimism should widen the margin/FCF gap rather than just reward both names equally.

Key Decisions for Investors

• Long NFLX on a pullback toward the post-news support zone; target a 10-15% upside over 1-3 months if margin guidance and ad revenue commentary confirm, but trim if revenue growth trends toward high single digits.
• Pair trade: long NFLX / short DIS over the next 1-3 quarters. Thesis is that incremental monetization and operating leverage accrue disproportionately to NFLX while DIS remains trapped in lower-quality earnings and mixed investor expectations.
• For event risk, consider a bullish NFLX call spread into earnings only if implied volatility is not already rich; the cleanest payoff is a limited-risk upside structure that benefits from a guidance beat without paying for a full rerating.
• Set a thesis alert if NFLX guides below ~11% revenue growth or if ad revenue commentary implies slower-than-expected doubling; that would argue for exiting longs and fading the multiple expansion story.