The bloom is off the rose for Netflix, which has dropped some 40 percent in value ever since Wall Street decided that the former hyper-growth technology platform has become something decidedly less sexy: a maturing, cash-positive media company. As my partner Matt Belloni recently wrote, this is more than just a correction as part of the broader Nasdaq sell-off. Investors are afraid that more competition and weakening subscriber growth portends a harder, more costly path forward. So naturally my friend Bill Ackman, the hedge fund investor, has stepped forward to buy the dip.

Ackman’s thesis is simple: the Netflix stock is oversold. On Friday, January 21, Ackman’s firm, Pershing Square Capital Management, began accumulating more than 3.1 million shares—a position worth more than $1 billion. From a recent low of around $354 a share on January 24, the stock has rebounded to around $384 a share, potentially giving Ackman a profit of some $90 million already. (He has not disclosed the average purchase price on his 3.1 million shares.) In a letter to his investors, Ackman praised Netflix for its strong recurring revenue, “best-in-class” management team, formidable “pricing power,” and the possibility of “substantial margin expansion” over a growing—albeit somewhat less rapidly than desired—subscriber base.