Ackman's Pershing Square sells Netflix stake

US hedge fund Pershing Square Capital Management has sold its stake in Netflix as the TV streaming service grapples with the fallout from plunging customer numbers.

Pershing Square, owned by billionaire Bill Ackman, pulled its investment after only three months at an estimated loss of $400m.

Ackman said it was “extremely difficult” to predict how Netflix would fare over the coming years after the platform suffered its first quarterly user decline in a decade.

Netflix is set to lose millions more subscribers this year as people start to cut back on discretionary spending with inflation spiralling.

The firm plans to revive growth by “monetising” more than 100 million households using its service without paying and launching a discounted subscription with advertisements for the first time.

“While we believe these business model changes are sensible, it is extremely difficult to predict their impact on the company’s long-term subscriber growth, future revenues, operating margins, and capital intensity,” Ackman told his fund’s investors.

“While Netflix’s business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty.”