Time for Jim and stuff. >> Why don't revisit PepsiCo? Now, here's a stocks down at a dollar and a half. It's back to 148. It sells at 18 time earnings. And you have Elliot in there. And I I just don't understand why people think that this thing can't be changed and made better. I mean, they're Look, they have a lot of good properties. And when I say 18 and Coca-Cola is a 22, that despair used to be the other way. Used to be that that PepsiCo is worth more. I I don't think that this is one you walk away from ...

Group 1 - TD COWEN has raised the target price for PepsiCo (PEP.US) from $140 to $155 [1]

Core Viewpoint - Elliott Management has disclosed a $4 billion stake in PepsiCo, representing 2% of the company's market value, and criticized the company for strategic missteps and declining market share in the soda business [1] Group 1: Strategic Concerns - The company is facing challenges in its North American beverage business, with growth and profitability lagging behind competitors due to strategic errors and market share loss in the soda segment [1] - Elliott suggests that the company should reassess its beverage bottling rights, potentially allowing local bottlers to distribute drinks while retaining ownership stakes or considering a spin-off of the North American bottling operations [1] Group 2: Food Business Performance - Elliott indicates that the disappointing performance of PepsiCo's beverage business has been offset by the resilience of its food business, which is now also showing signs of weakness [1] - The North American beverage and food segments each account for 30% of the company's annual revenue, highlighting the importance of both sectors to overall financial health [1] Group 3: Company Response - In response to Elliott's concerns, the company stated it would review the strategic issues raised in Elliott's letter, including targeted investments in innovation and product portfolio transformation [1]

Group 1: Hong Kong Stocks - Photovoltaic stocks rose in the morning, with Xinyi Solar (00968) up over 3%, Fuyao Glass (03606) up over 3%, and GCL-Poly Energy (00451) up over 3%. Domestic leading polysilicon companies have raised prices, and the market is focused on the restructuring progress in the polysilicon industry [1] - Heng Rui Medicine (01276) increased by over 5% after announcing the approval of HRS-7172 tablets for clinical trials by the National Medical Products Administration on September 2 [1] - Qingdao Bank (03866) rose over 2% as its major shareholder plans to increase holdings by 233 million to 291 million shares, recognizing the long-term investment value of the bank's stock [1] - Zhaojin Mining (01818) increased by over 1%, with a total market value exceeding HKD 100 billion, and the company is accelerating overseas project construction, indicating future growth potential [1] - Zhongsheng Holdings (00881) rose over 4%, with management optimistic about the new car market and smooth progress in the company's new energy business [1] - Innovent Biologics (09969) increased by over 5% after disclosing its interim performance report, with core products driving growth and accelerating multiple self-immune phase III clinical trials [1] - United Laboratories (03933) rose over 6% after announcing a 27% year-on-year increase in profit attributable to shareholders in its half-year results, with key progress in several products in the formulation segment [1] Group 2: U.S. Stocks - NIO (NIO.US) rose 3.13%, with vehicle deliveries in August 2025 reaching 31,305 units, a year-on-year increase of 55.2%, and total deliveries since 2025 reaching 166,472 units, up 30.0% [3] - Hesai Technology (HSAI.US) fell 2.91% as it plans to list in Hong Kong after passing the hearing [3] - Eli Lilly (LLY.US) rose 0.36% after Novo Nordisk's weight loss drug Wegovy outperformed it in a real-world comparative study [3] - Zai Lab (ZLAB.US) increased by 0.73% after announcing that its drug was approved in Hong Kong for treating recurrent or metastatic cervical cancer [3] - Beike (BEKE.US) rose 4.89% after reporting a 11.3% year-on-year increase in net income for the second quarter, leading multiple institutions to reaffirm a "buy" rating [3] - Gold stocks rose against the trend, with Gold Resource (GORO.US) up 15.80%, Harmony Gold (HMY.US) up 7.53%, and Kinross Gold (KGC.US) up 2.68%, driven by expectations of U.S. interest rate cuts and a weak dollar [3] - Corning (GLW.US) rose 2.15% after UBS raised its target price from $65 to $84 and upgraded its rating from "neutral" to "buy" [4] - Li Auto (LI.US) rose 4.50% as the founder announced plans to fully enter the high-end pure electric SUV market [4]

Core Viewpoint - Elliott Management Corporation has made a significant $4 billion investment in PepsiCo, aiming to push for a strategic overhaul to improve the company's lagging performance [1] Group 1: Investment and Strategy - Elliott has become one of the top five active investors in PepsiCo, excluding index funds, and has submitted a detailed reform proposal to the board [1] - The activist investor believes that PepsiCo represents a historic opportunity to revitalize a leading global company and unlock substantial shareholder value [1] - Elliott's proposal suggests that PepsiCo could see its stock price increase by at least 50% through the proposed reforms [1] Group 2: Current Challenges - PepsiCo is facing significant operational challenges, with its core product, Pepsi, dropping to fourth place in U.S. soda sales, behind Coca-Cola, Dr Pepper, and Sprite [4] - The company's food business, which accounts for approximately 60% of total revenue, is also under pressure, with sales growth slowing since late 2022 [4] - PepsiCo's market capitalization has decreased from around $270 billion in May 2023 to approximately $200 billion [5] Group 3: Proposed Changes - Elliott's key recommendations include evaluating the possibility of refranchising its bottling network, returning ownership to independent local bottlers, similar to Coca-Cola's successful refranchising in 2017 [5] - The firm also urges PepsiCo to streamline its extensive product portfolio by divesting non-core and underperforming assets [5] - Elliott emphasizes the need for PepsiCo to provide a more specific performance improvement plan to restore market confidence [5] Group 4: Company Response - PepsiCo has stated that it maintains a constructive dialogue with shareholders and will assess Elliott's viewpoints while expressing confidence in its existing strategy for sustainable growth [3][6] - The company has already been taking measures to address challenges, including cost-cutting initiatives and strategic adjustments to improve performance [6][7] - Recent financial results have exceeded analyst expectations, and the company anticipates a rebound in weak North American demand as strategic adjustments take effect [6]

Core Insights - Activist investor Elliott Management has invested $4 billion in PepsiCo and proposed a reform plan to the board, suggesting the evaluation of core business refranchising, divestiture of non-core assets, and streamlining the product portfolio [1] - Elliott believes that through these reforms, PepsiCo's stock price has the potential to increase by at least 50% [1] - PepsiCo's soda sales in the U.S. have dropped to fourth place, and the food business is under pressure, leading to a decline in the company's market value from its peak [1] Company Response - PepsiCo has stated that it will evaluate Elliott's views and engage in constructive communication with its shareholders while expressing confidence in its existing sustainable growth strategy [1] - Since the CEO took office, PepsiCo has implemented several measures, including cost-cutting, logistics integration, marketing expenditure assessment, and a relaunch of core brands, expecting a rebound in weak North American demand as strategic adjustments take effect [1]

Group 1 - Elliott Management has made a $4 billion investment in PepsiCo, aiming to push for a strategic overhaul to improve the company's lagging performance [1][4] - The activist investor believes that PepsiCo represents a unique opportunity to revitalize a leading global company and unlock significant shareholder value, projecting a potential stock price increase of at least 50% [1][6] - PepsiCo's stock saw a brief increase of 5% following the news, but closed with a more modest gain of 1.1% [1] Group 2 - PepsiCo is currently facing significant operational challenges, with its core product, Pepsi, dropping to fourth place in U.S. sales behind Coca-Cola, Dr Pepper, and Sprite [4] - The company's food business, which accounts for approximately 60% of total revenue, is also under pressure, with sales growth slowing since late 2022 [4][5] - PepsiCo's market capitalization has decreased from around $270 billion in May 2023 to approximately $200 billion [5] Group 3 - Elliott's proposals include evaluating the possibility of refranchising its bottling network and streamlining its extensive product portfolio by divesting non-core and underperforming assets [6] - The firm emphasizes the need for PepsiCo to provide a more detailed performance improvement plan to restore market confidence [6] - Elliott is recognized as one of the most active activist investors globally, managing over $70 billion in assets and known for driving change in various well-known companies [6] Group 4 - In response to Elliott's pressure, PepsiCo has expressed a willingness to engage in constructive dialogue while defending its existing strategic initiatives aimed at sustainable growth [3][7] - The company has already been taking steps to address its challenges, with CEO Ramon Laguarta focusing on delivering higher value to consumers since taking office in 2018 [7] - Recent financial results exceeded analyst expectations, and the company anticipates a rebound in weak North American demand as strategic adjustments take effect [7][9]

Core Viewpoint - Elliott Investment Management has acquired approximately $4 billion in shares of PepsiCo and plans to advocate for changes within the struggling beverage manufacturer [1] Group 1: Investment and Shareholder Engagement - Elliott's stake makes it one of PepsiCo's largest investors [1] - PepsiCo stated it will evaluate Elliott's views in conjunction with its growth strategy aimed at accelerating growth and creating long-term shareholder value [1] Group 2: Market Challenges - PepsiCo is facing challenges due to competitive pressures and changing consumer tastes, with its market value declining over 20% since its peak in May 2023 [1] - Elliott outlined a reform plan for PepsiCo, which may include restructuring its beverage division and reassessing its snack product portfolio [1] Group 3: Performance Concerns - The market share of PepsiCo's beverage division, which includes brands like Coca-Cola, Gatorade, and Mountain Dew, has been declining and has underperformed for over a decade [1] - Following the announcement, PepsiCo's stock price increased by 2.2% [1]

Core Viewpoint - Elliott Investment Management has acquired a $4 billion stake in PepsiCo, aiming to increase the company's stock price by 50% through strategic changes [1][2][6]. Group 1: Investment and Stake - Elliott's investment makes it one of PepsiCo's largest shareholders, contributing to a 6% increase in the company's stock price [1]. - The current stock price of PepsiCo is $151.43, reflecting a recent increase of 1.9% [1]. Group 2: Strategic Plans - Elliott's letter to PepsiCo's board outlines plans to refranchise bottling operations and potentially eliminate under-performing brands [2]. - The activist hedge fund emphasizes the need for PepsiCo to sharpen focus, drive innovation, and enhance efficiency to unlock shareholder value [4]. Group 3: Market Position and Challenges - PepsiCo's soda segment has fallen to fourth place in U.S. sales volume, trailing behind Coca-Cola, Dr Pepper, and Sprite [4]. - The food business, which constitutes 60% of PepsiCo's revenues, is facing pressure due to slowing sales growth and rising costs [7][11]. - The company's market value has decreased to approximately $200 billion, a 25% decline from its peak of $270 billion in May 2023 [11]. Group 4: Historical Context and Comparisons - Previous activist efforts, such as those by Nelson Peltz's Trian Fund Management, have attempted to influence PepsiCo's strategy without success [8]. - Coca-Cola's successful restructuring in 2017 serves as a benchmark for potential changes at PepsiCo, with Coca-Cola's market value now nearing $300 billion [12].

Activist Investor & Stake - Elliot Management takes a significant $4 billion stake in PepsiCo, becoming one of its largest investors [3] - Elliot's proposal could potentially deliver 50% upside to shareholders [1] - Elliot is among the most feared activist investors in corporate America, often achieving desired changes [7] Performance Concerns & Strategic Review - Pepsi trades at a substantial discount to peers and its historical average valuation [2] - Underperformance is driven by share loss and margin pressure in North American beverages, along with decelerating growth and declining profitability in North American foods [2] - Elliot suggests strategic reviews of the brand portfolio and bottler refranchising for the beverages side (Pepsi, Gatorade, Lipton) [2] - Elliot recommends streamlining and rightsizing the cost basis for the food side (Fritos, Lays, Doritos) [3] Potential Actions & Future Outlook - Strategic review might lead to a company split or separation from underperforming businesses with bolt-on acquisitions [5] - Pepsi is reviewing Elliot's perspectives within its strategy to drive sustainable growth [3] - Elliot has not called for board changes or firings at the executive level at this point [3]