Paul Singer’s Elliott Management Goes Activist On Pepsi 

Activist hedge fund Elliott Management has amassed a $4 billion stake in PepsiCo, as shares of the beverage and snack giant have declined by more than 24% from their peak in the summer of 2023. This comes as PepsiCo’s soda and food business units have been hemorrhaging market share to competitors.

Elliott is one of the world’s most aggressive activist hedge funds. Founded by the billionaire Paul Singer, it has a long track record of successfully restructuring companies.

Now, with PepsiCo in its crosshairs, according to a Wall Street Journal report citing people familiar with the situation, Singer and his team have built one of their largest-ever equity stakes, making the hedge fund one of the top five active investors, excluding index funds, in the company. 

Singer’s move comes after PepsiCo’s market cap has fallen to about $200 billion, down more than 24% from its 2023 peak of $270 billion.

PepsiCo share drawdown… 

The declining share price has been attributed to sliding soda sales, which have put it behind Coke, Dr Pepper, and Sprite. Besides soda, food sales have been slowing across its North America food unit since late 2022. 

Some Wall Street analysts have pitched to clients that PepsiCo should rethink its structure…

“We admit that refranchising the bottling business would take time and not be an easy undertaking,” RBC Capital Markets analyst Nik Modi told clients in a note late last year. “However, we consider it a critical step for the long-term health of the beverage business.”

Elliott has not revealed its plan of action regarding PepsiCo, but it has a long history of initiating turnarounds and restructurings for companies, as it did with Honeywell and Starbucks.