Elliott Management looks to put fizz back into Pepsi with $4B stake — as it presses for a turnaround

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].