- Alcoa (AA +4.5%) continues to rally following confirmation that Paul Singer’s Elliott Management bought a 6.4% stake in the company, which says it has had "constructive discussions" with Elliott.
- The activist firm also supports AA's planned spinoff next year, announced in September, of downstream assets into a separate company.
- “It’s obviously a vote of confidence from a firm that is steeped in strategic actions,” Sterne Agee CRT analyst Josh Sullivan tells Bloomberg.
- Elliott's stake makes it the second-biggest shareholder in the company after Vanguard Group, which had an 8.21% stake as of Sept. 30.
- Citigroup’s Brian Yu earlier reiterated his Buy rating on Alcoa, but trimmed his price target by $1 to $12, arguing that an analysis of the spinoff shows AA's stock has potential while warning that lower commodities prices and slowing earnings pose risks.
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Earlier: CNBC: Elliott Management takes 6.5% stake in Alcoa