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Something weird is going on with the Netflix stock. Despite collapsing again in April—costing Bill Ackman some $400 million on his $1.1 billion attempt to buy the dip—the company’s EBITDA margins remain an incredible 60 percent. Is it just me, or is the Netflix stock looking downright cheap these days? (This is not investment advice.)

Bill

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At the time, the news that Ackman was already dumping his Netflix shares was stunning. Among other things, Ackman has always been a proponent of taking a long-term perspective, much like his investing hero, Warren Buffett. (In fact, two of his fund’s most infamous bets, Herbalife and Valeant Pharmaceuticals, hewed to this timeline, with disastrous results.) In his letter laying out the bull case for Netflix, Ackman had written that he loved the business of streaming content, having previously bought a big stake in the Universal Music Group, a digital music content company, which provided him a lot of proximate exposure to the fine details of streaming economics. He praised the Netflix management, its business model of recurring revenues, its pricing power and its high EBITDA margins. He also lauded the “superb quality” of Netflix’s “industry-leading content,” which he wrote should continue to lead to higher growth and a wider “moat” around the business, despite the recent market correction...