PepsiCo (NASDAQ: PEP) soared as much as 7.2% intraday on Sept. 2 in response to news that activist investor Elliott Investment Management took a $4 billion stake in the beverage and snack giant. With a market cap of around $200 billion, the stake gives Elliott roughly 2% ownership in the company.
But since then, Pepsi’s shares have tumbled, down to $141.71 as of market close on Sept. 8. This means that Pepsi dropped lower than it was before the Elliott announcement.
Here’s how activist investors can influence companies, the reasons they usually get involved, Elliott’s argument for why Pepsi can turn around, and whether Pepsi is a dividend stock worth buying now.