Netflix among top stock gainers in wake of Ackman's big bet
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Netflix (NASDAQ:NFLX) is among the very top gainers in the S&P 500 today, up 7.4% in the wake of news that Bill Ackman and Pershing Square became a top-20 shareholder with this week's purchases of 3.1 million shares of the streaming TV giant's stock.
That's Netflix's (NFLX) biggest gain in at least a year, and it bounces the company's shares off their 22-month low. It also comes in sharp reaction to Netflix's unusually rough near-22% sell-off Friday after reporting subscriber growth that disappointed investors.
"Many of our best investments have emerged when other investors whose time horizons are short term discard great companies at prices that look extraordinarily attractive when one has a long-term horizon," Ackman says of the purchase.
He had started looking at Netflix when investing in Universal Music Group; "Now with both UMG and Netflix, we are all-in on streaming as we love the business models, the industry contexts, and the management teams leading these remarkable organizations."
It's raised questions of whether Ackman would push for change at the company - but he's decidedly less aggressive on that angle after failing year ago in a proxy fight at Automatic Data Processing. And he says "I have long admired Reed Hastings and the remarkable company he and his team have built. We are delighted that the market has presented us with this opportunity."
Meanwhile, Rosenblatt has cut its price target on Netflix to $400 from $450; the new target implies just 4% upside.
On Monday, Jefferies cut its rating, saying "the best content slate we've seen" isn't doing much to drive subscriber growth.