Hedge fund manager William Bill Ackman sold his entire stake in Netflix (NASDAQ:), a move that resulted in a $400 million loss after the streaming service provider’s shares tumbled due to a decline in subscribers.

Ackman was the CEO and founder of Pershing Square Capital Management. He sold 3.1 million Netflix shares that it had acquired in three months.

Earlier this week, Netflix reported a drop in the number of global paid subscribers for the first time in ten years, sending the company’s shares declining by 35% to $226.19 per share.

In January, Ackman spent $1.1 billion on Netflix after the company’s shares plunged due to its weaker than expected subscription forecast. Netflix’s earnings report for this week revealed a drop of 200k in paid subscribers. This prompted the billionaire investor, Ackman, to sell his shares.

Ackman said that Netflix’s potential business model changes such as focusing on non-paying customers and advertising seemed reasonable, however, it would make the streaming giant very unpredictable in the short run.

Ackman released a statement saying that Netflix’s business was fundamentally easy to understand. However, there have been recent events which has led to a loss of confidence in Ackman’s ability to forecast the company’s future prospects.

According to him, his hedge fund has only a handful of companies in its portfolio and prefers companies with high predictability.

By Senad Karaahmetovic