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Pfizer Stock Rebounds as Activist Investor Starboard Steps In with $1 Billion Stake

AInvestWednesday, Oct 9, 2024 6:30 pm ET
1min read

Pfizer recently experienced a 3.46% surge in its stock price as Starboard Value, a well-known activist investor, disclosed a significant stake of $1 billion in the company. This move has sparked interest as Pfizer seeks to recover from a steep decline in stock and revenue post-pandemic peaks.

Starboard, led by co-founder Jeff Smith, has a history of pushing for change through strategic boardroom influence. The firm's strategy remains uncertain, but their entry into Pfizer marks one of their largest challenges yet. Investors reacted positively, adding about $5 billion to Pfizer's market value.

Starboard’s investment is further supported by former Pfizer executives Ian Read and Frank D’Amelio, which adds weight to potential transformations. Industry experts believe Starboard excels in enhancing profitability and discipline at companies they target, particularly in the healthcare sector.

Pfizer has grappled with declining demand for its COVID-19 products, prompting significant cost-cutting measures. The company aims to shift focus towards oncology, exemplified by its $43 billion acquisition of Seagen, a biotech firm specializing in innovative cancer treatments.

Despite these aggressive strategies, Pfizer’s stock has fallen over 50% from its December 2021 peak. The company has also faced setbacks with certain pipeline drugs, forcing reevaluation of ongoing projects.

The entry of Starboard suggests potential shifts, but specifics are yet to be outlined. Pfizer’s CEO, Albert Bourla, may now encounter increased pressure to deliver impactful changes and enhance shareholder value. "We do not comment on market speculation or rumors," a Pfizer spokesperson stated.

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