PepsiCo shares jumped on Tuesday after Elliott Investment Management acquired a significant stake, calling it a “rare” and “historic” opportunity for a turnaround in the soft drink giant.
Shares climbed as much as 5% in early trading before settling up 2.4%, after falling about 2% year-to-date. Elliott, led by Paul Singer, now ranks among PepsiCo’s top five active investors, with a $4 billion stake.
In a letter to PepsiCo’s board, Elliott outlined a plan to restore momentum, streamline the portfolio, and potentially refranchise its bottling network. The activist firm believes PepsiCo shares could see at least a 50% upside if its strategies are implemented.
“While unfortunate, this trajectory has created a historic opportunity… PepsiCo today represents a rare chance to revitalize a leading global enterprise,” Elliott wrote.
PepsiCo has been improving efficiency, cutting costs, and reviewing marketing and logistics operations. In July, the company reported quarterly earnings and revenue exceeding analysts’ expectations, projecting a rebound in North American demand.
Pepsi said it maintains an active dialogue with shareholders and values constructive input on long-term growth. Elliott, with over $70 billion under management, has a track record of activist interventions that often deliver strong returns, including stakes in Phillips 66 and Southwest Airlines, and a historic $2.4 billion settlement in Argentina.