William Ackman withdraws from Netflix, incurring a $400 million loss as the company’s stock plummets

Billionaire investor William Ackman liquidated a $1.1 billion bet on Netflix on Wednesday, incurring a loss of more than $400 million as the streaming service’s stock fell following news that it had lost subscribers for the first time in a decade.

Pershing Square Capital Management, Ackman’s hedge fund, made an abrupt U-turn, selling the 3.1 million shares it had purchased just three months before as Netflix’s stock dropped 35% to $226.19.

In January, the investor invested more than $1 billion in the streaming service, just days after a disappointing subscription forecast pushed the share price lower.

Now, a second round of bad news about subscribers—the company said it had lost 200,000 prompted the fund manager to abandon a company he had praised just weeks before.

Netflix announced that it lost 200,000 subscribers in the first quarter, falling far short of its modest prediction of adding 2.5 million subscribers. Its decision to suspend service in Russia after it invaded Ukraine in early March resulted in the loss of 700,000 members.