Billionaire investor buys post-earnings sale of Netflix Stock

William Ackman’s Pershing Square bought 3.1 million shares of Netflix

Name FAANG Netflix Inc. (NASDAQ: NFLX) sees a buyout this morning, after billionaire investor William Ackman decided to take advantage of the stock’s massive post-earnings pullback and buy 3.1 million shares, worth nearly $1 billion . In a letter to Pershing Square Capital Management, its hedge fund clients, Ackman said the hedge fund is now one of the top 20 shareholders.

The stock was last seen rising 5.6% to trade at $379.92, as it moves away from near two-year lows. In fact, the stock hit its lowest close since March 2020 – an infamously low period for the markets – just yesterday, settling at $359.70. NFLX still has some way to go, as the shares have fallen more than 30% in a single week of trading, putting them at a year-over-year deficit of 35.9%.

The last weeks disappointing subscriber growth was the straw that broke the camel’s back and brought a deluge of bear notes. These continue to pour in, despite today’s news, through a reduction in Rosenblatt Securities’ price target to $400 from $450. The brokerage group left this earnings event split, as 15 of 29 covering NFLX still consider it a “strong buy” and 14 say “hold” or worse. Meanwhile, the 12-month consensus price target of $532.23 is a hefty 48% premium to last night’s close.

Options traders rushed to NFLX last week as the bears piled up. A broader look shows that the stock has a 50-day buy/sell volume ratio of 0.74 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE) and NASDAQ OMX PHLX ( PHLX), which exceeds 99% of the readings. of the last 12 months. This means that while calls still outnumber bets on an overall basis, the latter are picked up at a much faster rate than usual.