PepsiCo shares popped Tuesday after Elliott Investment Management took a significant stake as the activist investor sees a “rare” and “historic” opportunity for a turnaround in the iconic soft drink giant.
Shares of PepsiCo climbed more than 5% in premarket trading. The stock is down about 2% this year, significantly lagging the broader market.
The Paul Singer-founded Elliott’s bet in Pepsi is worth $4 billion, becoming the consumer giant’s top five active investors excluding index funds, according to FactSet. The activist investor sent a presentation and letter to Pepsi’s board of directors Tuesday, detailing a clear agenda focused on restoring business momentum.
“While unfortunate, this disappointing trajectory has created a historic opportunity: With the right mindset and an appropriately ambitious turnaround plan, PepsiCo today represents a rare chance to revitalize a leading global enterprise and unlock significant shareholder value,” Elliott wrote in its letter.
The Wall Street Journal first reported Elliott’s new stake earlier Tuesday.
