Netflix Co-CEO Reed Hastings bought $20 million shares of the streaming giant after a big drop in the stock price following quarterly earnings. The stock’s volatility — since recent financial results showed lighter than expected subscriber growth – is viewed as a buying opportunity by Hastings and others investors with faith in the long-term success of the first and leading streaming platform. Pershing Square Capital hedge fund billionaire Bill Ackman bought into Netflix for the first time, acquiring 3.1 million shares for over $1 billion. He sees the company as the “primary beneficiary of the growth in streaming and the decline in linear TV, driven by its superior customer experience, a vast and diverse amount of superb, constantly refreshed content” among other advantages. Hastings purchased just over 50,000 shares Thursday and Friday, according to an SEC filing on Friday evening, in ten transactions ranging from $387 to $393 per share. The stock was trading near $700 at its 52-week high last fall.

On Jan 20., Netflix posted strong financials for the 2021 fourth quarter but a year-over-year gain of 8.28 million subscribers was light, as was its forecast of adding fewer than 2.5 million new customers in the current quarter. Executives on a call after the earnings seemed stymied by the slower growth, citing disruption caused by the rocky path of the pandemic.

The numbers prompted a major selloff with the shares tumbling more than 20% the next day, Friday, and approaching a two-year low near $351 on Monday. They were volatile for the rest last week, including a 5% jump on the Ackman news.

Investor have punished the stock before after quarterly misses but not like this. (Part of it may be a major correction in the broader market over the last few weeks on inflation and interest rate jitters.) There are still lots of bulls on Netflix, but bears fear structural changes in the streaming sector led by increased competition and the ongoing need for heavy content investment are eroding its dominance.

Some picked up on a sentence in the list of risk factors included in the company’s annual report filed with the SEC this week that read, “Our business could be adversely impacted by costs and challenges associated with strategic acquisitions and investments.”