By Svea Herbst-Bayliss

BOSTON (Reuters] – Bill Ackman, a hedge fund manager cheered Netflix (NASDAQ)’s stock drop three months ago. Other investors were worried about Netflix’s weak subscriber growth and bought 3 million shares.

Pershing Square Capital Management, a billionaire investor, suffered losses Tuesday as Netflix shares plummeted 26% in trading after it reported its first loss of subscribers in 10 years.

Ackman who moves stock prices regularly by exiting or buying in to companies, didn’t say how much he paid. His Netflix stake was unveiled on Jan. 26, but he did reveal the amount to his investors. However, he stated that he acquired the stake the day following the announcement of Netflix.

Netflix shares were traded from Jan. 21 to Jan. 26, in an area of $351.46 to $409.14. After-hours trading on Tuesday saw a 26% decline in Netflix shares, which brought them down to $257.98. This would mean that Ackman’s fund suffered a loss of approximately 26% and 37% respectively on their Netflix investments.

It traded at $500 before Netflix released its January outlook. Ackman said that the stock’s shares were “undervalued” after they had fallen for months.

The drop in revenue, although unwelcome to Ackman may be not unexpected. He had earlier warned investors that Netflix was facing “near-term volatility” in its quarterly growth and profitability. However, Ackman said that long-term, he anticipates double-digit annual revenues, expanded operating margins, and earnings growth per share greater than 20%.

Pershing Square spokesperson declined to comment.

Pershing Square Holdings suffered small losses by March 31st, before Netflix shares fell on Tuesday. This likely dragged down returns even further. These returns are stark in contrast to the three-years of double-digit gains, which include a 70% increase in 2020.

Total assets of the company now exceed $21.5B, with permanent capital that would-be investors can sell only if new buyers are available. Ackman can be less concerned about investors leaving and needing to exit positions in order to make redemptions.

Ackman is no stranger to big falls. He was also hurt when Chipotle shares (NYSE:) cost his fund $145 million late October 2017. In an interview with Reuters, he joked that his investment team would eat Chipotle until stock prices returned to $500 per share. Chipotle was closed Tuesday at $1,632.03.