Netflix (NFLX) Plunged Due to Investors' Concerns Over Acquisition Pricing

LVS Advisory, a New York City-based full-service investment firm, recently released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. LVS Event-Driven Portfolio appreciated 9.1% (net) in 2025, while the LVS Growth Portfolio gained 6.2% (net). This compares to 8.8% for the High-Yield Bond Index and 17.9% for the S&P 500 Index, the benchmark. The LVS Event-Driven Portfolio was established in 2019 to provide a stable, uncorrelated portfolio with consistent annual net returns, and its 7-year track record validates the goal. In contrast, the Growth Portfolio lost 8.2% in Q4, after beating the S&P 500 Index for the initial three quarters. For more information on the Portfolio’s top picks in 2025, please check its top five holdings.

In its fourth-quarter 2025 investor letter, LVS Advisory highlighted stocks like Netflix, Inc. (NASDAQ:NFLX). Netflix, Inc. (NASDAQ:NFLX) is a streaming entertainment company. On February 10, 2026, Netflix, Inc. (NASDAQ:NFLX) stock closed at $82.21 per share. One-month return of Netflix, Inc. (NASDAQ:NFLX) was -7.16%, and its shares are down 19.98% over the past twelve months. Netflix, Inc. (NASDAQ:NFLX) has a market capitalization of $348.726 billion.

LVS Advisory stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its fourth quarter 2025 investor letter:

"Netflix, Inc. (NASDAQ:NFLX) remains our largest investment in the portfolio and was held at an 18% weight at the start of Q4. The stock declined 21.8% in Q4 primarily due to its announced $83 billion acquisition of Warner Brother Discovery.

As a reminder, we purchased a 6% position in Netflix in 2022 at an average cost of $28.31. Netflix became our largest holding because our thesis was proven correct and the stock price soared (we never added or trimmed after 2022). I kept the stock in our portfolio because I saw more potential upside. Netflix has become the global category killer in scripted entertainment and is rapidly eroding market share from linear TV. I believe the company will continue to take share as it reinvests in live entertainment, sports content, video games, and advertising capabilities…” (Click here to read the full text)

Netflix, Inc. (NASDAQ:NFLX) is in 14th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 154 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of the third quarter, which was 133 in the previous quarter. While we acknowledge the potential of Netflix, Inc. (NASDAQ:NFLX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Netflix, Inc. (NASDAQ:NFLX) and shared a list of best 52-week low blue-chip stocks to buy. Polen Capital Management sold its holdings in Netflix, Inc. (NASDAQ:NFLX) in Q4 2025, due to regulatory and leverage concerns tied to the acquisition. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.