Netflix Stock Rises After Ackman's Pershing Square Discloses Stake

Netflix stock rose more than 4% on Thursday after billionaire investor Bill Ackman's Pershing Square Capital Management disclosed a new stake in the streaming giant, marking a return to the company more than four years after exiting its previous investment at a loss. The hedge fund revealed in its second-quarter shareholder letter that it had acquired a 4.9% portfolio stake in Netflix, a position representing approximately 3.15 million shares.

The renewed investment comes as Netflix continues expanding its advertising business and live sports offerings while investors reassess the company's valuation following a prolonged share-price correction. Pershing Square, known for running a concentrated portfolio of fewer than a dozen holdings, said it believes the streaming company is well-positioned for long-term growth despite the stock's sharp decline from last year's peak.

In the shareholder letter, Pershing Square executives Bill Ackman and Chief Investment Officer Ryan Israel wrote that their investment thesis has changed significantly since they exited Netflix in early 2022 after losing more than $400 million on the position. "When we first invested in early 2022, investors...