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Ackman’s Pershing Square reveals position in Starbucks, says shares could double

The activist hedge fund disclosed it has about a $900 million stake in the coffee giant

Starbucks coffee on a table
Ackman predicted shares may double over the next three years

Pershing Square Capital Management LP, the hedge fund led by activist investor William Ackman, sent shares of Starbucks Corp (NASDAQ:SBUX) higher after revealing its position in the company.

Ackman revealed the fund has 15.2 million shares, or around $900 million worth, of the coffee giant during a presentation at Grant’s Interest Rate Observer fall conference in New York, as per a CNBC report.

READ: Starbucks to triple its annual store closures and scale back growth

"If [same-store sales] and valuation revert closer to historical average levels, we believe that SBUX shares can more than double over the next three years," said Ackman’s in a presentation. He also referred to the Seattle-based chain as a "rare opportunity to own one of the world's best businesses at a discount."

Starbucks responded to the disclosure, saying: "We view active, engaged dialogue that we have with shareholders as critical input into our strategic approach and we value constructive feedback on delivering long-term shareholder value. We look forward to maintaining a productive dialogue with Mr. Ackman as we do with all of our shareholders."

Ackman said in August that the fund had a position in a then-unidentified company.

The presentation stated the average cost for Starbucks was $51 per share. Shares were trading at $57.81 in Tuesday afternoon trading.

The fund also recently disclosed stakes in aerospace company United Technologies Corporation (NYSE:UTX) and home improvement chain Lowe's Companies Inc (NYSE:LOW).

 

Contact Lenore Fedow at [email protected]

Follow her on Twitter@LenoreMariee

Quick facts: Starbucks

Price: 88.67 USD

NASDAQ:SBUX
Market: NASDAQ
Market Cap: $104.72 billion
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