It seems that Starbucks (NASDAQ: SBUX) The company will soon have an activist investor on its side who is pushing for change. Several media reports have indicated that a well-known activist investment firm has taken a stake in the coffee chain’s popular operator. On Friday, investors welcomed the news with the company’s shares trading up nearly 7%. That was a much better performance than the company’s performance in 2011. Standard & Poor’s 500 The index, which fell 0.7% on the day.
Interesting shift in institutional ownership
Wall Street Journal The financial newspaper broke the story on Friday. Citing unnamed “people familiar with the matter,” the paper said Elliott Investment Management had built a “significant” stake in Starbucks. The paper added that it could not say how big the stake was, or whether Elliott was also aiming to secure board seats.
In recent weeks, Elliott, which has a long history of some success as a startup, has had Active investorThere has been an incitement by Starbucks management to devise ways to boost its stock price, magazine While the company’s stores are always popular, we can’t say the same about its shares lately, which are down more than 17% year-to-date and 21% over the past 12 months.
After years of hard work building its network of stores, Starbucks no longer had much room to grow through expansion alone. Meanwhile, economic struggles in China—a critical international market for the company—were hurting its business.
Relief demonstration?
Neither Elliott nor Starbucks management have yet commented on the matter. magazinea report ‘.
Assuming the article is accurate, it’s no surprise that Starbucks has attracted a well-resourced activist investor. It’s an industry leader that has stumbled recently and been punished by Mr. Market for it. And some of those unhappy investors are surely returning to the stock now that a shareholder has emerged who is (apparently) determined to push hard for some strategy changes.
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Why Investors Are Excited About Starbucks Stock Today Originally posted by The Motley Fool
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