Netflix’s largest shareholder loses over $400 mn as streaming giant mulls crackdown on password sharing

Days after Netflix revealed that it lost more than 200,000 subscribers in less than 100 days, one of the largest shareholders in the streaming company lost over $400 million and has reportedly backed out of further investment.

According to Bloomberg, Bill Ackman of Pershing Square Capital Management on Wednesday said that his fund had sold their 3.1 million shares in the company.

This stock had been valued at over $1 billion ahead of Netflix's latest investor relations report,losing over $430 million in value after the stock fell over 30 per cent.

"We require a high degree of predictability in the businesses in which we invest due to the highly concentrated nature of our portfolio," Ackman wrote in aletterto 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. Based on management's track record, we would not be surprised to see Netflix continue to be a highly successful company and an excellent investment from its current market value.”

Ackman was among the 20 biggest investors in Netflix, buying more than 3 millionshares in the first part of 2022.

On Wednesday, shares of Netflix plunged down more than 35 per centafter the streamer disclosed its weak earnings.

The drop caused Netflix to shave more than $50 billion off its market cap. It is now the worst-performing stock of 2022 in the S&P 500, down 62.5 per cent year-to-date.

Meanwhile, Netflix has indicated that it will crack down on households sharing passwords, reports BBC.

The streaming giant estimates more than 100 million households are breaking its rules by sharing passwords.

Netflix warned shareholders another two million subscribers were likely to leave in the three months to July.

Watch |Gravitas: Over 200,000 subscribers leave Netflix

(With inputs from agencies)