Elliott owns Starbucks shares and is in talks with administration: WSJ

A Starbucks cafe in Amsterdam.

Nicolas Economou | Only photo |

Elliott Management has acquired a significant stake in coffee chain Starbucks and is currently negotiating with management about ways to improve the company's stock price, the Wall Street Journal reported Friday, citing people familiar with the matter.

Representatives for Elliott declined to comment. The company did not own any shares in Starbucks as of March 31, the most recent disclosure date.

A Starbucks spokesman said the company does not comment on rumors and speculation. Starbucks shares rose more than 6 percent on Friday.

Elliott is one of the most prolific activist investors and one of the largest hedge funds in the world. The firm has acquired a number of sizeable positions in recent months, including stakes in Southwest, SoftBank, Johnson Controls And Texas Instruments.

The Journal was unable to ascertain the extent of Elliott's position or his specific demands, but noted that an agreement was possible.

Starbucks struggled with an activist effort from its own unions earlier this year. That effort, which was based on an organizing effort that began in 2021, ended with the withdrawal of the Strategic Organizing Center's candidates. Talks between management and labor are ongoing.

Starbucks has faced challenges for several quarters and has gone through a number of leadership changes in recent years. In April, the company reported disappointing quarterly results, with sales at its U.S. stores down 3% and customer traffic down 7%. The coffee chain also lowered its forecast for 2024.

Starbucks reported a mid-double-digit rate of incomplete orders via its mobile app and said casual customers were stopping by less often.

CEO Laxman Narasimhan, who is currently under increased pressure, spoke of the need to make improvements in the stores.

Narasimhan was personally selected by returning Starbucks CEO Howard Schultz to lead the company after his previous successor, Kevin Johnson, resigned. Schultz recently commented on Starbucks' challenges but said he does not plan to return for a fourth term as CEO.

— CNBC's Amelia Lucas contributed to this report.

Correction: This story has been updated to correct that the Strategic Organizing Center has withdrawn its nominees for the Starbucks board. An earlier version misstated the events.