Jericho’s Big Netflix Bet

The hedge fund made the streaming giant its largest long position in the first quarter.


Illustration by II

Jericho Capital Asset Management made a big bet on Netflix in first-quarter 2024. The hedge fund headed by Josh Resnick bought 613,000 shares of the streaming giant at a value of $372 million. This represents nearly 10 percent of the U.S. stock portfolio, making it the firm’s largest long.

The Netflix purchase was one of several major moves Jericho made in the first quarter, including the liquidation of what was its largest long at year-end. The trades were made from a position of strength.

Jericho is up more than 27 percent this year even after experiencing a flat April, according to an investor. About half the gains were made on the short side, and the smaller Jericho Capital Special Opportunities fund is up about 50 percent this year, the investor says.

Jericho declined to comment.

The flurry of moves among the firm’s largest holdings is not unusual. Until recently, it was common for Jericho to make a slew of major changes to its largest positions from quarter to quarter.

It is not known what price it paid for Netflix or when it bought the shares. The stock is up about 30 percent for the year but is roughly flat so far this quarter. Last week, Netflix said its ad-supported subscription tier had 40 million monthly active users.

In the first quarter, Jericho also nearly tripled its stake in AppLovin Corp., which immediately became its second-largest long, accounting for about 7.2 percent of the U.S. stock portfolio’s capital. The company produces software that helps market, monetize, and analyze apps. AppLovin’s stock has surged about 115 percent this year and is up about 20 percent since the end of March.

And in the first three months, Jericho established a new position in video game maker Electronic Arts, now its ninth-largest long position. In the same time period, it fully unloaded two of its three largest longs as of year-end and acquired another major position. For example, Jericho liquidated its entire stake in telecom giant T-Mobile, its largest long in the second half of last year even after it reduced the stake by 27 percent in the fourth quarter. Jericho also completely shed its shares in Akamai Technologies, its second-largest long at year-end.

In the same quarter, Cisco completed its acquisition of Splunk, Jericho’s fourth-largest long at year-end. Splunk produces software for searching, monitoring, and analyzing machine-generated data via a web-style interface. And Jericho liquidated its stake in No. 9 long Kenvue, formerly the consumer health care division of Johnson & Johnson, until it was separated in August 2023. Jericho had initially invested in the company in fourth-quarter 2023.

Resnick founded Jericho in 2009. The firm, which currently manages about $3 billion, focuses on tech, media and entertainment, telecom, and consumer issues. Jericho was up 20.2 percent in 2023, so it is solidly above its high-water mark despite losing 23 percent in 2022.