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Add Starbucks Corp.’s best-ever stock rally to Elliott Investment Management LP’s growing tally of juicy returns at companies targeted by the activist firm.

The coffee chain’s shares surged 25 per cent on Tuesday, adding more than US$20 billion in market value, after the company ousted its chief executive and poached Brian Niccol from Chipotle Mexican Grill Inc.

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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 per cent of them had their shares gain the day it became known that the activist built a stake, with the average return at about six per cent, according to data compiled by Bloomberg. Starbucks rallied almost seven per cent the day reports first surfaced that Elliott was a big holder.

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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 per cent. 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 discussing a settlement with Elliott that would give the activist investor representation on the board, Bloomberg News reported Monday.

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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 seven per cent.

Here’s where other major investments from the firm stand:

Goodyear

Shares of Goodyear Tire & Rubber Co. surged 21 per cent in May 2023, the biggest jump since at least 1980 at the time, when Elliott said that it had amassed a 10 per cent stake in the tire maker.

Since then, the company has changed its chief executive officer and other leadership following a pressure campaign by Elliott. The stock was about 11 per cent higher one year after the activist’s stake became known.

SoftBank

SoftBank Group Corp. jumped when news broke in February 2022 that Elliott had built a stake in the company, 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 US$4.8-billion buyback at Elliott’s urging, and even discussed going private with the investor. Reports in August 2022 that Elliott had reduced almost all of its SoftBank stake sent shares lower.

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Twitter

In early 2020, Bloomberg reported that Elliott took a sizable stake in then-Twitter Inc. and planned to push for changes at the social media company, now called X Corp. Later in the year, Elliott and private equity firm Silver Lake Technology Management LLC 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 US$1 billion in incremental equity capital to help facilitate the separation.

In January 2023, Elliott, along with Apollo Global Management Inc., led the US$900-million purchase 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 with a board seat under certain conditions.

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The stock is up about 17 per cent year to date after gaining 66 per cent in 2023, its best year since 2019.

Catalent

Catalent Inc. shares rose when it said in August 2023 that it would add four new members to its board and undertake a strategic review as a part of a settlement with Elliott.

The company struggled after experiencing a pandemic boom due to its partnerships with makers of COVID-19 vaccines. Catalent’s stock is up more than 30 per cent this year.

Etsy

Shares of Etsy Inc. jumped 9.1 per cent in February, its best day in about six months, when Elliott said it had built a 13 per cent stake in the online marketplace, making it the largest shareholder in the company at the time, according to data compiled by Bloomberg.

Still, shares remain under pressure. The stock is down about 35 per cent this year after falling 32 per cent in 2023.

Cubic

Cubic Corp. shares jumped more than 30 per cent when it said that Elliott — which had taken a stake — and a private equity partner were interested in purchasing the company in September 2020.

Elliott and Veritas Capital Fund Management LLC offered to buy Cubic for US$71 per share, or an equity value of US$2.21 billion, the following February.

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Ultimately, the company accepted a revised bid from Elliott after its original was topped by Singapore Technologies Engineering Ltd., which offered US$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.

Bloomberg.com

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