(Bloomberg) -- Add Starbucks Corp.’s best-ever stock rally to Elliott Investment Management’s growing tally of juicy returns at companies targeted by the activist firm.
The coffee chain’s shares surged 25% Tuesday, adding more than $20 billion in market value, after the company ousted its chief executive and poached Brian Niccol from Chipotle Mexican Grill Inc.
The jump marks the latest win for Paul Singer’s multi-strategy investment firm that is known for amassing stakes in beaten-down companies and pushing for changes in leadership and strategy to boost shareholder value.
Elliott’s track record now includes more than 70 targets since 2020. Some 95% of them saw shares gain the day it became known the activist built a stake, with the average return at about 6%, according to data compiled by Bloomberg. Starbucks rallied almost 7% the day reports first surfaced that Elliott was a big holder.
The same data showed that two-thirds of the targets held their advances one year after Elliott’s stake was disclosed, with those seeing an average gain of 37%. A spokesperson for Elliott declined to comment.
While Elliott hasn’t publicly outlined asks of Starbucks, many of its targets have changed their management after the firm’s involvement. Elliott called the Starbucks CEO shuffle a “transformational step forward” for the company. Starbucks was also discussing a settlement with Elliott that would give the activist investor representation on the board, Bloomberg News reported Monday.
Elliott also stepped up its effort to force a turnaround at Southwest Airlines Co., pushing ahead with a proposed overhaul of the carrier’s board. Southwest shares were little changed on that news, but when Elliott publicly disclosed a large stake in June, the stock jumped 7%.
Here’s where other major investments from the firm stand:
Goodyear
Shares of Goodyear Tire & Rubber Co. surged 21% in May 2023, the biggest jump since at least 1980 at the time, when Elliott said that it had amassed a 10% stake in the tire maker. Since, the company changed its chief executive officer and other leadership following a pressure campaign by Elliott. The stock was about 11% higher one year after the activist’s stake became known.
SoftBank
SoftBank jumped when news broke in February 2022 that Elliott had built a stake in the company and had privately engaged with the firm’s leadership and was working on solutions to help it reduce its discount to intrinsic value. The company planned a $4.8 billion buyback on Elliott’s urging, and even discussed going private with the investor. Reports in August 2022 that Elliott reduced almost all of its SoftBank stake sent shares lower.
In early 2020, Bloomberg reported that Elliott Management took a sizable stake in then-Twitter and planned to push for changes at the social media company, now called X. Later in the year, Elliott and private equity firm Silver Lake reached an agreement with Twitter that the company would appoint three new directors to its board as well as create a committee to review its leadership and governance. One of those board seats went to Jesse Cohn, a managing partner at Elliott. Filings show that Elliott had exited its stake in Twitter by the end of June 2022. Elon Musk bought the company in April 2022.
Western Digital
Elliott called for Western Digital Corp. to separate its flash business and undergo a full strategic review in May 2022 and offered $1 billion in incremental equity capital to help facilitate the separation. In January 2023, Elliott along with Apollo Global Management led the purchase of $900 million of convertible preferred stock of Western Digital. At the same time, Western Digital and Elliott revised a June 2022 letter agreement to provide the activist a board set under certain conditions. The stock is up about 17% year to date after gaining 66% in 2023, its best year since 2019.
Catalent
Catalent, Inc. shares rose when it said in August 2023 that as a part of a settlement with Elliott it will add four new members to its board and undertake a strategic review. The company had struggled after experiencing a pandemic boom due to its partnerships with makers of Covid-19 vaccines. Catalent’s stock is up more than 30% this year.
Etsy
Shares of Etsy Inc. jumped 9.1% in February, it’s best day in about six months, when Elliott said it had built a 13% stake in the online marketplace, at the time making it the largest shareholder in the company, according to data compiled by Bloomberg. Still, shares remain under pressure — the stock is down about 35% this year after falling 32% in 2023.
Cubic
Cubic Corp. shares jumped more than 30% when it said that Elliott Management — which had taken a stake — and a private equity partner were interested in purchasing the company in September 2020. Elliott and Veritas Capital offered to buy Cubic for $71 per share, or an equity value of $2.21 billion the following February. Ultimately, the company accepted a revised bid from Elliott after its original was topped by Singapore Technologies Engineering Ltd. who offered $2.41 billion to purchase the company in March 2021.
Public Storage
Elliott had built a stake in Public Storage and nominated six directors to its board in December 2020. In January 2021, the company added two new board members and established an advisory committee focused on its long-term strategy and growth. Elliott exited most of its stake in the company, per a February 2022 filing.
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