Back in late January, hedge fund manager Bill Ackman saw Netflix’s stock price plunge as a $1.1 billion buying opportunity. So Wednesday’s nosedive, with the stock falling 38% in early hours, raises the question: Is he hunkering down or doubling down?
Whatever Ackman’s doing, he certainly took a substantial hit following the company’s first-quarter earnings report, when Netflix revealed it had lost 200,000 subscribers in the first three months of the year and expects to lose 2 million more this quarter.
Exactly how big a hit he took is a nebulous number. When Ackman revealed the purchase, he didn’t say what he paid. But he did note that he’d bought more than 3.1 million shares between Jan. 21 and Jan. 26, when the stock was in the $351.46 to $409.14 range.
Assuming the best-case scenario for his purchase, buying all of those shares at the low end of the range would still represent a loss for Ackman of nearly $415 million in less than 24 hours.
Who is Bill Ackman?
Ackman is no stranger to volatility. In 2017, his investment in Chipotle bombed, only to rebound, then triple in price. And through his hedge bets at the start of the pandemic, he turned $27 million into $2.6 billion.
The founder and CEO of the hedge fund Pershing Square Capital Management made his reputation as an activist investor. He’s often publicly courted his investments (which isn’t always welcome), and his New York–based firm is known for taking stakes in companies and pressuring their leaders to make changes or face proxy fights.
In early 2015, he made an ill-fated bet on Valeant Pharmaceuticals International, which resulted in two years of double-digit portfolio losses for his hedge fund firm. Investors then began pulling out of Pershing Square.
He has also courted controversy outside of the business world, tweeting in 2021 that he believed Kyle Rittenhouse to be a “civic-minded patriot” and that the 18-year-old had acted in self-defense when he killed two unarmed protesters and wounded a third.
A buying opportunity?
Ackman bought Netflix on a dip once and could see this as an opportunity to expand his stake in the company.
In announcing the initial purchase, he told investors in Pershing Square, “The opportunity to acquire Netflix at an attractive valuation emerged when investors reacted negatively to the recent quarter’s subscriber growth and management’s short-term guidance.”
And in a tweet at the time, he added, “I have long admired Reed Hastings and the remarkable company he and his team have built. We are delighted that the market has presented us with this opportunity.”
Correction: An earlier version of this story said that Ackman made the Netflix purchase a month ago. It has been changed.
This story was originally featured on Fortune.com