Elliot Management buys large stake in Duke Energy


Hopefully ratepayers won't get bitten in the process:

Elliott has not yet released any letters or presentations on the company, but based on past investments in this area and the level of engagement, we expect that they have a $1B+ investment in Duke. With the annual meeting recently passing, director nominations for next year are not due until January 2022, so management has time to prove itself.

However, we do not expect Elliott to sit by quietly during that time. We expect them to become vocal and engaged shareholders putting pressure on management to create value. The right plan could create tens of billions of dollars of value for shareholders.

I'm not even going to try to analyze this just yet, no amount or strength of coffee will aid me in interpreting Stock Talk. But that "creating value" thing has the hairs on the back of my neck standing up. That being said, this could also signal a quicker end to coal-burning power plants and a more aggressive move to renewables:

The hedge fund’s play to remake Evergy could lead to the shuttering of coal plants sooner and more spending on wind farms and solar power. It might also trigger layoffs and threaten careers in Evergy’s corporate suites. And it could alter how much customers pay for electricity, although analysts differ on whether consumers would welcome the changes.

Elliot sent a letter to Evergy’s board of directors claiming it could make more money for shareholders. “A renewed focus on improving core utility operations and investing in Evergy’s critical electric infrastructure can rectify its prolonged underperformance,” the letter reads.

Elliott is pressing the leadership at Evergy to invest more in renewable energy generation, close down its coal plants, and increase the overall efficiency of its operations.

It's early days, but this needs to be watched closely.