Bill Ackman is well-known for buying large stakes in what he believes are undervalued companies and using his influence as a major shareholder to push management to make changes to unlock value.

In May, Ackman revealed that he had established two new positions in his Pershing Square hedge fund, which holds an equity portfolio valued at over $10 billion. One of those positions, Brookfield Corp, has performed well since Ackman established his position. However, the other has seen its share price decline about 15% since he first purchased around $275 million worth of shares.

Ackman's losing bet is Nike (NYSE: NKE). If he thought it was a value earlier, he probably thinks it's an even better value at its lower price today. Should you take the opportunity to buy shares at a better price than the billionaire?

Why Ackman decided to "Just Do It"

In Pershing Square's semi-annual report released last month, Ackman decided to defer discussion of his latest stock purchase. But there are a few things about Nike that might make it attractive to an investor like Ackman.

First of all, Nike shares were already down nearly 50% from their all-time high (reached in 2021) when Ackman decided to invest in the company. Today, they're down 56%.

Nike's share price declined as the the company stumbled in its transition toward direct-to-consumer sales. The company cut ties with many wholesalers in an effort to grow its direct relationships with consumers and sell through its own stores and website. However, it mismanaged inventory, which ended up eating into its profit margins.

But management has owned the missteps, and it's getting back on track. Nike is still the leading athletic apparel brand in the world, and that brand value gives it a lot of leeway when taking on a new strategy. That brand, an intangible asset and a source of Nike's competitive advantage in the market, is likely another reason Ackman found the stock attractive.

Nike's decision to cut out many of its wholesale accounts was partially influenced by the ability to control its brand messaging with its e-commerce operations, branded stores, and specialty retailers. Nike is also looking to foster brand loyalty with its membership programs, including Nike Run Club, Nike Training Club, and other digital apps.

Lastly, Nike's committed to delivering $2 billion in cumulative cost cuts over the next three years. A more efficient operation, combined with the shift toward more direct-to-consumer sales, should lead to higher operating margin over time.