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Ackman's Pershing Square unveils $900 million stake in Starbucks


Added 10-09-18 07:03:02pm EST - “William Ackman said on Tuesday his activist hedge fund Pershing Square Capital M...” - Reuters.com

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Posted By TheNewsCommenter: From Reuters.com: “Ackman's Pershing Square unveils $900 million stake in Starbucks”. Below is an excerpt from the article.

NEW YORK (Reuters) - William Ackman said on Tuesday his activist hedge fund Pershing Square Capital Management LP has built a roughly $900 million position in Starbucks Corp (SBUX.O), betting the world’s biggest coffee chain can overcome stagnant sales in its home market.

Ackman’s unveiling of a 1.1 percent stake in Starbucks comes as the Seattle-based company is trying to convince investors it can fend off heavy competition from rivals, including fast-food chains and high-end coffee shops. Last month, it announced a reorganization that includes leadership changes and job losses.

While activist shareholders are known to pick fights with chief executives and corporate boards, Ackman sounded a conciliatory tone on Tuesday, as he unveiled Pershing Square’s investment at the Grant’s Fall 2018 Conference in New York.

Ackman said recent actions by Kevin Johnson, who took over from Howard Schultz as Starbucks CEO last year, were “encouraging” and that Starbucks’ recent challenges are “fixable with appropriate management execution.” Schultz stepped down as Starbucks’ executive chairman in June.

Ackman praised the re-evaluation of Starbucks’ portfolio, the closure of Teavana stores, a rejiggering of its owned and licensed businesses, its cost-cutting initiatives and a $19 billion three-year share buyback program.

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