Business

Ackman’s Pershing Square unveils $900 million stake in Starbucks

NEW YORK (Reuters) – William Ackman said on Tuesday his activist hedge fund Pershing Square Capital Management LP has built a roughly $900 million position in Starbucks Corp (SBUX.O), betting the world’s biggest coffee chain can overcome stagnant sales in its home market.

Ackman’s unveiling of a 1.1 percent stake in Starbucks comes as the Seattle-based company is trying to convince investors it can fend off heavy competition from rivals, including fast-food chains and high-end coffee shops. Last month, it announced a reorganization that includes leadership changes and job losses.

While activist shareholders are known to pick fights with chief executives and corporate boards, Ackman sounded a conciliatory tone on Tuesday, as he unveiled Pershing Square’s investment at the Grant’s Fall 2018 Conference in New York.

Ackman said recent actions by Kevin Johnson, who took over from Howard Schultz as Starbucks CEO last year, were “encouraging” and that Starbucks’ recent challenges are “fixable with appropriate management execution.” Schultz stepped down as Starbucks’ executive chairman in June.

Ackman praised the re-evaluation of Starbucks’ portfolio, the closure of Teavana stores, a rejiggering of its owned and licensed businesses, its cost-cutting initiatives and a $19 billion three-year share buyback program.

“We look forward to maintaining a productive dialogue with Mr. Ackman as we do with all of our shareholders,” Starbucks said in a statement. Pershing Square declined to comment further.

Starbucks shares rose as much as 5.5 percent on the news and closed 2.1 percent higher at $57.71 on Tuesday. The shares have been flat this year, while the S&P 500 Index .SPX has risen 8 percent.

Slideshow (2 Images)

In his presentation dubbed “Doppio” – a reference to a double shot of espresso – Ackman said Starbucks’ share price could more than double over the next three years if the company can meet its targets.

Pershing Square built its stake in Starbucks in the last three months, according to people familiar with the matter. It was not immediately clear whether Pershing Square had any discussions with Starbucks prior to unveiling its position.

Ackman has made his name in the activist shareholder world as a passionate advocate of his positions, even breaking down in tears on occasion while defending his bets on companies such as Herbalife Nutrition Ltd (HLF.N) and Target Corp (TGT.N).

After three years of losses at Pershing Square, Ackman has adopted a lower profile that appears to be paying off, with his hedge fund up 13.8 percent in the first nine months of the year. The average hedge fund has gained less than 2 percent during the same period.

This is partly thanks to Ackman’s managing to turn previous losses into wins. Last year, he lost a bitter proxy contest against payroll processing company Automatic Data Processing Inc (ADP.O), yet the company’s recent strong performance has boosted his portfolio.

Pershing Square, which has $8.4 billion in assets under management, has also unveiled positions this year in Nike Inc (NKE.N), United Technologies Corp (UTX.N) and Lowe’s Companies Inc (LOW.N). None of these investments resulted in a public fight, and Pershing Square has already exited Nike.

Historically only one or two of Ackman’s roughly one dozen positions develop into the kind of public fights that make headlines, like the short bet against Herbalife or his effort to rescue drug maker Valeant that cost him billions of dollars.

Ackman also has experience in the food retail sector, having invested in McDonald’s Corp (MCD.N) over 10 years ago and in Chipotle Mexican Grill Inc (CMG.N) more recently.

Reporting by Svea Herbst-Bayliss in New York and Uday Sampath Kumar in Bengaluru; Editing by Matthew Lewis


Source link

health news headlines provided courtesy of Medical News Today.

Advertisement

Advertisement Small

Flickr

  • Paranoids
  • prolog
  • Just before rain
  • 86 Fahrenheit
  • Vivian
  • badinage
  • ceinturon
  • Zuzanas
  • Xandra

About Author

Follow Me

Collaboratively harness market-driven processes whereas resource-leveling internal or "organic" sources. Competently formulate.

ThemeForest

Collaboratively harness market-driven processes whereas resource-leveling internal or "organic" sources. Competently formulate.

  • Johannes - Multi-concept Personal Blog & Magazine WordPress theme
  • Opinion - Modern News & Magazine Style WordPress Theme
  • Trawell - WordPress travel theme
  • Pinhole - WordPress Gallery Theme for Photographers
  • Typology - Text Based Minimal WordPress Blog Theme
  • Gridlove - Creative Grid Style News & Magazine WordPress Theme
  • Vlog - Video Blog / Magazine WordPress Theme
  • Herald - News Portal & Magazine WordPress Theme
  • Sidewalk - Elegant Personal Blog WordPress Theme

View more

View More Job Search Results

Calendar

June 2019
M T W T F S S
« May    
 12
3456789
10111213141516
17181920212223
24252627282930

Pages

Recent Comments

    RSS Meks Blog

    • Using Google Trends for market research to leverage your content creation ideas June 12, 2019
      Did you know you can use Google Trends for market research and target your customer needs, tailor content strategy, in a much better way? The post Using Google Trends for market research to leverage your content creation ideas appeared first on Meks.
      Ivana Cirkovic
    • How WordPress can help you to build and increase brand awareness June 6, 2019
      How can you build and improve brand awareness with WordPress and what steps are needed in that strategy? The post How WordPress can help you to build and increase brand awareness appeared first on Meks.
      Ivana Cirkovic
    • Starting a photography blog: The secrets successful photo bloggers won’t tell you May 30, 2019
      Is starting a photography blog the next step for your personal branding and getting out there with your work? Sure is! And here’s how you can do it! The post Starting a photography blog: The secrets successful photo bloggers won’t tell you appeared first on Meks.
      Ivana Cirkovic
    • 5+ best forum plugins for WordPress to build a loyal community in 2019 May 22, 2019
      Looking for the best forum plugin for WordPress to build a community and keep them engaged? Let us save you the time and choose among these 6 we recommend. The post 5+ best forum plugins for WordPress to build a loyal community in 2019 appeared first on Meks.
      Ivana Cirkovic
    • Easily setup Facebook instant articles for your WordPress website (plus tips & tricks ) May 16, 2019
      In case you still haven’t set up Facebook Instant Articles for your WordPress blog or site, here’s why we recommend you to do it. The post Easily setup Facebook instant articles for your WordPress website (plus tips & tricks ) appeared first on Meks.
      Ivana Cirkovic
    • 8 things people usually miss before starting a blog May 8, 2019
      Have you ever wondered what things need to be done before starting a blog or do you think it’s just writing and not much else? Boy, are you in for a surprise! The post 8 things people usually miss before starting a blog appeared first on Meks.
      Ivana Cirkovic
    • WordPress RSS feed plugin – 7 recommendations 2019 edition May 1, 2019
      Wondering whether you need a WordPress RSS feed plugin or not? Let us show you what beautiful things you can make with it! The one thing people nowadays tend to say is that emails and RSS feeds are dead. A fact that couldn’t be more from the actual truth. Knowing that we live in a […]
      Ivana Cirkovic
    • How to make money as a travel blogger (10 tips you can start using today) April 23, 2019
      Have you ever wondered how to make money as a travel blogger, especially when you see how many are out there doing it? Here are at least ten ways you can, too! The post How to make money as a travel blogger (10 tips you can start using today) appeared first on Meks.
      Ivana Cirkovic
    • 6+ video marketing tips to improve your vlogging [2019 edition] April 17, 2019
      Wondering what would be some of the best video marketing tips that can help you step up your vlogging game? We’ve got you covered! The post 6+ video marketing tips to improve your vlogging [2019 edition] appeared first on Meks.
      Ivana Cirkovic
    • 18 top Google Chrome extensions for WordPress April 10, 2019
      Looking for the most useful WordPress Chrome extensions to make your site more functional and engaging? Take a look at our list of top Chrome addons to use! The post 18 top Google Chrome extensions for WordPress appeared first on Meks.
      Ivana Cirkovic

    Text

    Distinctively utilize long-term high-impact total linkage whereas high-payoff experiences. Appropriately communicate 24/365.

    Archives