Bill Ackman Lost $400M On Netflix Shares In 2022: How Much Would The Billionaire Investor Have If He Didn't Sell?

In 2022, Netflix Inc's NFLX stock traded down more than 65% amid growth concerns and an overall sell-off in the tech industry.

During that dip, billionaire investor Bill Ackman purchased more than $1 billion worth of shares through his hedge fund Pershing Square Capital while the stock was around $400 a share, disclosing the position in January, 2022. 

House Of Cards: But, after a lackluster earnings report and uncertainty regarding the streaming company's ad-based subscription strategy, Netflix's stock continued to move lower and Ackman exited the position when shares were trading around $225 a share in April 2022. 

In total, Ackman held around 3.1 million shares of Netflix for about 3 months, losing around 40% on the trade.

See Also: Bill Ackman’s Warren Buffett-Inspired Strategy Hits A Snag? Pershing Square USA Delays IPO Indefinitely After Slashing Target By 90%

For a couple of months, the sale looked like a smart way to cut losses early. Netflix's stock continued moving lower in May and June, getting as low as $175 a share. But then the Invesco QQQ Trust Series 1 QQQ and the overall tech industry rebounded rapidly, and Netflix followed suit.

Netflix's stock surpassed Ackman's original cost basis in June 2023, about 18 months after he initially bought the shares. Then, the stock kept moving higher and eventually reclaimed its all-time high of around $700 a share earlier this summer. 

If we are conservative with estimates, and assume that Ackman bought the shares at their high of $409.15 during the period we know he added the shares, his Neftlix position would be up more than 53% based on its current price of around $627 a share.

Today, 3.1 million shares of Netflix would be worth nearly $2 billion. 

All in all, Ackman and Pershing took a loss of around $400 million on the trade but could have had unrealized gains of nearly $1 billion had the hedge fund held through the downturn and volatility. 

The trade weighed on Pershing's returns that year, with 2022 being the only year the fund delivered a negative return, finishing the year down 8.8%, according to its website. But, Ackman and his fund bounced back in 2023, finishing the year up more than 20%, and is on pace for another positive return of more than 20% in 2024.

According to 13F filings, some of Ackman's biggest positions are currently Chipotle Mexican Grill CMG, Alphabet Inc GOOG and Hilton Hotels Corporation HLT.

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Image: Harvard Association for Law and Business/ Tracy Tolf