Activist investor Elliott Investment Management has reportedly built a sizeable position in Starbucks — sending the coffee chain’s stock higher in late Friday trading.
Elliott is said to have pushed Starbucks — which has faced criticism over the long wait — to find new ways to boost its stock price, according to the Wall Street Journal, which first reported Elliott’s stake.
Shares of the Seattle-based coffee giant rose nearly 7% to $79.27 on the news. But the company’s shares are down 23% in the past year.
Elliott has a history of shaking up struggling businesses. The firm has recently pushed for changes at companies including Southwest Airlines and software company Salesforce.
“We do not comment on rumors or speculation,” a Starbucks spokesperson told The Post in a statement.
Elliot declined to comment.
Starbucks’ share price took a hit in April when the chain, the world’s largest coffee company by location and sales, reported a decline in same-store sales for the first time in nearly three years.
CEO Laxman Narasimhan — who succeeded longtime executive Howard Schultz in March 2023 — has faced criticism from his predecessor for his handling of the company.
Narasimhan has had to cut earnings estimates several times since taking over, and Starbucks’ market value has fallen — from nearly $115 billion under Schultz to $89 billion as of Friday.
Schultz criticized his replacement’s business strategy and even offered advice on how the company could move forward in a LinkedIn post in May.
A major complaint from Starbucks customers is long morning wait times, with some exasperated customers cooling their heels for up to 40 minutes to get their java fix.
To combat the lines, Starbucks has changed some of its work policies. Starbucks bartenders, under the old method, prioritized cold drink orders over hot drink orders, regardless of which order was placed first. But this method was found to delay waiting customers.
The coffee chain has also begun tapping employees to act as “game callers” who step away from brewing when stores are particularly busy and help with any extra tasks needed to prevent jams.
Starbucks has been trying to attract new customers with special discounts for app users and expanded menu options.
The news of Elliott’s push for change comes just months after a coalition of unions ended its boardroom fight at Starbucks after the company agreed to work toward labor agreements.
Starbucks workers have been working to unionize since 2021, demanding better wages and working conditions.
The Strategic Organizing Center (SOC), a coalition of North American labor unions, had asked investors to elect three of its director candidates to Starbuck’s 11-member board.
The fight was closely watched on Wall Street because it marked the first time a labor union used tools traditionally used by hedge funds to lobby for seats on a corporation’s board.
By postal wire
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