Bill Ackman says that in early 2022, after Pershing Square bought into Netflix (NFLX), he met with the company's management and suggested a cheaper, ad-supported plan. "They said we're never going to do it," he told Shane Parrish on The Knowledge Project in an episode uploaded on Sept. 29. "About three or four weeks later they announced earnings. And if you go back and review the earnings call, management seemed shell-shocked […] They missed the subscriber numbers again […] They talked, 'Well, we're going to have to adapt, we're going to have to launch an advertising model.' Literally three weeks before they said they would never do it."
That is Ackman's account of a private meeting, and Netflix has never confirmed it. The public record around it is not in dispute. On Jan. 21, 2020, co-founder and then-CEO Reed Hastings said during the company's earnings interview that Netflix wanted to be "the safe respite" with "none of the controversy around exploiting users with advertising." The company separately called speculation about an ad-supported plan "completely false." On April 19, 2022, after Netflix reported its first quarterly subscriber decline in more than a decade, Hastings noted that “those who have followed Netflix know that I have been against the complexity of advertising,” then said the company would explore a lower-priced ad tier. The ad plan launched that November.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
Pershing Square sold the next day. On April 20, 2022, the firm disclosed that it had exited a position of more than 3.1 million shares; Bloomberg put the loss at more than $430 million, although Ackman has since rounded it to $400 million. Netflix fell 35% that session to close at $22.62, adjusted for the 10-for-1 split in November 2025, or $226.19 per share for the shares that traded that day. "We made the decision to exit on the thesis, if you will, being broken," Ackman said on the podcast. He recalled telling investors that "Pershing Square invests in the highest certainty companies in the world, and we think the dispersion of outcomes here has widened dramatically." Then the part that makes this a trade rather than a regret: "We took the money, we bought Google, Alphabet."
So, which side of that swap won? Barchart's price history answers it. Netflix stock closed at $70.57 on Oct. 14, 2026, up about 212% from the $22.62 exit-day close. Alphabet (GOOGL) closed at $347.64 on Oct. 14, up about 172% from its $128.04 close on April 20, 2022, adjusted for its 20-for-1 split in July 2022. Both figures are price-only and exclude Alphabet's small dividend. On the numbers, the stock Ackman sold beat the stock he bought with the proceeds by roughly 40 percentage points over four and a half years. One caveat belongs next to that: Pershing did not hold Alphabet the whole way. Filings show it sold out of Alphabet in the quarter ended June 30, 2026, which Ackman said was to fund a new Microsoft (MSFT) position, so the firm's actual Alphabet result depends on prices we cannot see.
Ackman is generous about what Netflix did after he left. "They executed extremely well. They built a very successful advertising model, they became an even more dominant company, they became a much more cash flow generative business, and the streaming wars they won," he said. The problem, in his telling, was the price. “The stock, because they executed really well, went back to a very high multiple and not interesting,” he said. "And then relatively recently the stock got cut in half again."
That last phrase checks out almost to the decimal. Netflix peaked at a split-adjusted $133.91 on June 30, 2025 and closed at $67.06 on Oct. 2, 2026, down roughly 50%. NFLX stock has also been one of the worst large-cap performers of 2026, now down about 28% from its 2025 year-end close of $93.76. During the second quarter of 2026, when Pershing was buying, shares traded between roughly $70 and $108. "So now we had the high certainty business we thought we owned," Ackman said. "They proved themselves at a price that made sense. We bought it back."
The return showed up in the firm's filings in August, when Ackman's new Netflix position was first reported; it was at about 3 million shares, roughly 4.9% of the portfolio, with Netflix down more than 16% year-to-date (YTD) at the time. NFLX stock has since fallen further. Netflix reported Q3 results on Oct. 20, its first earnings call since Ackman went public with his version of the 2022 meeting.
The lesson Ackman drew is not the one a trader would draw. He sold Netflix on new information, not on price, and he says price alone is not a reason to sell or to sit out. When asked what an ordinary person with a paycheck should do, he said: "Start young, so the sooner you can start putting aside money that you can invest for the long term, the better for your retirement. You know, the power of compounding. I wouldn't sit around holding cash because you think the market's expensive." The arithmetic above suggests the Netflix shareholders who ignored his exit in 2022 did fine by that rule. So did he, eventually, by coming back.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
Dear Spotify Stock Fans, Mark Your Calendars for October 22 Billionaire Bill Ackman Says Netflix Told Him 'We're Never Going to Do It' on Ads, Then Announced an Ad Model 'Literally 3 Weeks' Later Costing Him $400 Million The 13 Best S&P 500 Stocks to Buy Now, According to Barchart’s Screeners Nvidia Rumors Just Gave Ambarella Stock a Big Boost