Elliott Investment Management, one of the world's largest activist investors, has built a significant position in Starbucks, and is engaging in discussions aimed at enhancing the coffee giant's stock performance, according to a report by the Wall Street Journal citing unnamed sources.

Starbucks' stock, which has declined by 23% over the past year, surged by nearly 7% on Friday after news of Elliott's stake broke, closing at $79.27.

The company's stock had previously dipped in April when Starbucks, the world's largest coffee chain by location and sales, reported a decline in same-store sales for the first time in nearly three years. Additionally, the company posted lower-than-expected profits due to weaker demand in its primary markets, the United States and China. This disappointing earnings report led Starbucks to revise its annual sales forecast downward.

The poor earnings performance also drew comments from former CEO Howard Schultz, who is still one of the company’s major shareholders, and suggested on LinkedIn that Starbucks needs to overhaul its US operations. Schultz, who served as CEO three times, left the company's board in 2023, shortly after Laxman Narasimhan, a former PepsiCo executive and Reckitt Benckiser CEO, was appointed as the new CEO.