The investment—which Ackman announced during a presentation at a New York investment conference—involves a stake worth $900 million. Ackman’s presentation said that Starbucks’ return including dividends is flat over three years, but that its forward price-to-earnings ratio of 22 is at a “substantial discount” to its historical average.

Ackman also singled out Starbucks’ expansion into China as a cause to be bullish on future growth. “China will become an increasingly greater percentage of the total company over time,” he said. “We believe Starbucks’ recent challenges are fixable with appropriate management execution.”

Ackman’s Pershing Square fund has faced a tough 2018. After posting three straight years in the red, Pershing conceding defeat in a prolonged and bruising battle to short the stock of Herbalife and laid off workers as the fund was reportedly “losing investors at a rapid pace.” Pershing saw some good news with its investment in another restaurant chain, Chipotle’s, which is up 53% so far this year.

Starbucks’ stock peaked at $64.68 a share in April 2018, capping an 88% rise in the previous three years. Since that peak, however, the stock has lost 11% of its value. The news of Ackman’s stake in the company caused its shares to rise as much as 5% briefly before closing the day up 2%.

Last month, Starbucks CEO Kevin Johnson announced an corporate reorganization that would involve layoffs of top-level managers and other staff. The shakeup is meant to revive sales as the company faces competition from new regional chains and as demand for its signature Frappuccino iced-coffee drinks is declining.

“We must increase the velocity of innovation that is relevant to our customers,” Johnson said in a memo to employees. “To accomplish this, we are going to make some significant changes to how we work as leaders in all areas of the company.