“This the moron who’s supposed to replace me?” -Buffett shaking his head in disappointment

For all you guys who rage-sold a stock at the bottom and then spent the next four years watching it rip face without you… Bill Ackman just proved there’s no tax bracket high enough to escape bag-fumbler’s remorse. (One of us, one of us!).

The wannabe Buffett Pershing Square founder is pressing “Continue Watching” on Netflix nearly four years after rage-quitting his position with a $400 million loss. 

Sadly for little Billy, Netflix did not circle back and offer him a cheaper subscription. Shares have mooned about 650% since he canceled. 

So yes… Ackman is buying back his ex-stock at 7.5 times the price after spending four years watching it get hotter without him. His argument is that Netflix has also become almost unrecognizable since he dumped 3.1 million shares in 2022. 

Back then, the only thing getting screwed during Netflix and chill were shareholder’s portfolios. The company lost 200,000 subscribers, snapped a decade-long growth streak and detonated 35% of its market value in one day. 

Ackman lasted approximately three months. (Can someone say “panic-sell?).

He agreed that Netflix’s proposed password-sharing crackdown and cheaper advertising tier made sense, but said those changes made the company’s future too difficult to predict. And when you run a concentrated portfolio holding around a dozen companies, “We’ll see what happens” isn’t exactly the bedtime story investors want to hear.

Four years later, Pershing Square believes the mystery has largely disappeared. In the firm’s own words, Netflix has “effectively won the streaming wars.”

The company now has more than 325 million subscribers, nearly twice the combined total of Disney+ and HBO Max. Its password crackdown turned freeloading exes into paying customers, its ad-supported tier is marching toward $3 billion in revenue, and its expansion into live events and sports has made the platform considerably harder to cancel.

Meanwhile, the content arms race that once terrified Ackman has cooled off.

Netflix’s cash content spending has grown at an annual rate of just 2% since 2021, while the company now converts 90% of its earnings into free cash flow. 

And much of that cash is being fed into buybacks, giving Netflix another way to juice earnings besides putting Adam Sandler in basketball shorts and pointing a camera at him.

All jokes aside, Billy boy has a good defense for everyone claiming he’s just “chasing the stock.”

Look no further than the stock chart. Netflix shares have fallen 50% from their June 2025 high of $134, cutting the company’s valuation from more than 40 times forward earnings to approximately 21 times.

The decline started as Netflix chased Warner Bros around for months before losing the bidding war in February. Fortunately, getting cucked at the altar came with a $2.8 billion consolation prize. 

Wall Street is now worried Netflix viewers are running out of things to watch while AI prepares to firehose cheap content across the internet. 

Pershing Square isn’t buying the doomsday case.

Ackman believes short-form video is stealing eyeballs primarily from traditional television and weaker streaming platforms… not Netflix. Ackman’s view is that AI may turn every basement dweller into a movie studio, but it won’t turn them into Christopher Nolan.

If anything, Netflix could use AI to sharpen its recommendations, improve advertising and stretch its enormous content budget further than competitors can.

Pershing expects that machine to produce double-digit revenue growth and nearly 20% annual earnings growth as margins widen and the share count shrinks. 

May this whole story serve as a lesson not to abandon your thesis just months into a position… because there’s nothing worse than buying high, selling low and eventually discovering you were right all along.

At the time of publishing this article, Stocks.News holds positions in Netflix and Disney as mentioned in the article.