Starbucks surges as activist Elliott takes sizeable stake, WSJ Says

July 20, 2024 07:06 AM AEST | By Investing

Google News:

Starbucks surges as activist Elliott takes sizeable stake, WSJ Says

Recent News

Spring 2025 Roundtable Recap: Advancing Beverage Environmental Sustain...

Patricia Corsi Named to Forbes World's Most Influential CMOs for...

Entergy Texas Marks 25 Years of Fan Donations To Help Customers Beat t...

Sustainability Resource Hub: Strategies, Metrics, and Best Practices

Investing.com -- Starbucks jumped late into the close Friday after the Wall Street Journal reported that activist fund Elliott Investment Management has taken a sizeable stake in the coffee chain.

Starbucks Corporation (NASDAQ:SBUX) closed up 6.9% Friday, but is nursing losses of about 15% year to date.

Elliott, which has built a reputation for forcing chance at tech companies, has been in talks with the company in recent weeks on ways to boost its share price, and a possible agreement could be reached soon, the Wall Street Journal reported Friday, citing unnamed sources.

But the size of Elliott’s stake as well as other demands including whether the activity fund is seeking seats on Starbucks' board couldn’t be determined, the report added.

The coffee chain has only recently put an ugly proxy fight in the rearview mirror after reaching an agreement with a group of labor unions.

The activist's interest comes as the company is facing slowing growth after reporting a decline in foot traffic and weaker-than-expected quarterly results in April that forced the coffee chain to cut its guidance for second time this year.

Starbucks has sought to turn its fortunes around by sprucing up its menu, ramping up promotional offers and improving speed of service that has seen "increased traffic during the evening and on weekends, and continued strength in delivery and mobile orders," Wedbush said Friday, citing its recent checks.

The risk of another slash to guidance is unlikely, Wedbush added, though cautioned that "2025 visibility remains very limited."

Investors are likely to be eager for a further update on performance when Starbucks report fiscal third-quarter results due July 30.

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.