A Starbucks coffee shop in Amsterdam.
Nicolas Economou | Nurphoto | Getty Images
Elliott Management has acquired a significant stake in the coffee chain Starbucks and is working with management to find ways to improve the company's stock price, the Wall Street Journal reported Friday, citing people familiar with the matter.
Representatives for Elliott declined to comment. The company did not own any stake in Starbucks as of March 31, its last disclosure.
A Starbucks spokesman said the company does not comment on rumors and speculation. Starbucks shares rose more than 6% on Friday.
Elliott is one of the most prolific activist investors and one of the largest hedge funds in the world. The firm has taken several large positions in recent months, including stakes in Southwest, Soft Bank, Johnson controls and Texas Instruments.
The Journal was unable to obtain the size of Elliott's charge or his specific demands, but said a settlement was possible.
Earlier this year, Starbucks faced an activist initiative from its own workers’ unions. That initiative, which grew out of an organizing drive that began in 2021, ended in a settlement. Talks between management and workers are ongoing.
Starbucks has faced challenges for several quarters and has seen a number of leadership changes in recent years. In April, the company reported disappointing quarterly results, with U.S. same-store sales down 3% and traffic down 7%. The coffee chain also lowered its outlook for 2024.
Starbucks reported incomplete order rates through its mobile app of about 15% and said casual customers were coming in less frequently.
Chief executive Laxman Narasimhan, now under increased pressure, has cited the need for store improvements.
Narasimhan was handpicked by Starbucks CEO Howard Schultz, who returned to the company to lead it after his previous successor, Kevin Johnson, stepped down. Schultz recently weighed in on the challenges facing Starbuck, but said he does not plan to return as CEO for a fourth time.
—CNBC's Amelia Lucas contributed to this report.
