Why the chill has lifted on Netflix for Ackman and others
This time, Ackman’s rationale is explicit. In Pershing Square’s interim financial report for the six months ended June 30, 2026, the firm stated that “Netflix has since effectively won the streaming wars,” and projected that the company would “compound revenue at a double-digit growth rate, with content costs growing more slowly than revenue.”
It’s a combination expected to drive meaningful margin expansion. The firm also described Netflix’s valuation as representing “a substantial discount,” allowing it to acquire a premium business at a favorable price. Netflix shares jumped 3.4 percent on the day of the disclosure.
Earlier this year, Netflix was in a bidding war with Paramount for Warner Bros. Discovery, Inc., ultimately refusing to increase its offer as Paramount’s offer was considered superior by the WBD board.
A beaten-down valuation that caught attention
Netflix entered August 2026 trading roughly 42 percent below its 52-week high of $126.71, at approximately $74.21 per share, according to analysis published by The Motley Fool. At around 23 times forward earnings (well below its five-year average multiple of approximately 40 times) the stock had drifted into territory that looks more like a mature utility than a dominant global platform.
Ackman’s thesis, as outlined in the interim report, rests on several intersecting factors. Netflix’s position with over 325 million global paid subscribers, which is nearly double Disney+ and HBO Max combined, its conversion of roughly 90 percent of earnings into free cash flow, and a $27.1 billion share repurchase authorization representing approximately nine percent of its market capitalization.
