PepsiCo (PEP) stock jumped 5% in premarket trading on Tuesday after the Wall Street Journal reported that activist investor Elliott Investment Management built a $4 billion stake in the company.
According to the report, Elliott plans to use its position, which makes it one of Pepsi’s top five shareholders excluding index funds, to angle for changes at the company and boost the share price.
Pepsi shares have underperformed this year as consumers drink less soda and eat fewer snacks, and as scrutiny over ingredients increases. Year to date, the stock is down 2%, compared to a nearly 10% rise in the S&P 500.
Pepsi has aimed to reverse some of these trends by leaning into other categories, such as energy drinks. Last week, the company announced it boosted its stake in energy drink maker Celsius in a $585 million deal.