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The Bull Case for Netflix

Yes, the stock is down 70 percent and there are legitimate frets about an emerging ad-tier, churn, and increased competition. But the company is only trading at about 4x EBITDA while Tesla is trading at, um, 55x. This is not investment advice, but something weird is going on here.

Bill Ackman
Bill Ackman, founder and C.E.O. of Pershing Square Capital Management. Photo: Bryan Bedder/Getty Images
William D. Cohan
July 6, 2022

Back in April, the jack-of-all-trades billionaire hedge fund manager Bill Ackman bailed out of Netflix, just three months after purchasing some 3.1 million shares of the company, worth around $1.1 billion, and forcing him to digest a loss of around $400 million. Only months earlier, in a letter to his hedge fund investors, Ackman had enumerated the various reasons why the firm believed “the opportunity to invest in Netflix at current prices offered a more compelling risk/reward and likely greater, long-term profits for the funds.”