Activist investor Elliott takes takes a stake in Glaxo
Elliott, s US hedge fund, took an undisclosed multibillion-pound stake in GSK last week, driving the share price up by 4.6%.


GlaxoSmithKline has suffered several setbacks this year. A cancer drug seen as a potential “blockbuster” failed a late-stage trial, while another drug suffered an unexpected delay owing to Covid-19, says Jamie Nimmo in The Times. Some analysts worry that these “serial disappointments” are becoming a “major concern for GSK’s... outlook”. But help may be at hand. Elliott, the US hedge fund led by activist investor Paul Singer, who is “feared in boardrooms” worldwide, took an undisclosed multibillion-pound stake in GSK last week. The news boosted the shares by 4.6%.
No wonder shareholders are frustrated, says Lex in the Financial Times. GSK’s share price has moved sideways since Emma Walmsley was appointed CEO four years ago. However, “one wonders what change is sought”. After all, while most activists “demand some form of corporate divestments or restructuring”, Walmsley “already has this in train”, with a “long-planned” flotation of GSK’s consumer health business due in the next year, “leaving a biopharma core behind”.
Elliott could ask GSK to “cut back on in-house research and development, and spend more on acquisitions” to boost the “otherwise lacklustre” drug pipeline, says Aimee Donnellan on Breakingviews. It could also insist that Walmsley “spin off the consumer division, rather than list it and hang on to a stake”, which might “make a takeover of either business easier”. In any case, the positive reaction to Elliott’s involvement suggests that if it does make demands, “it can count on other shareholders’ support”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
How to get free shares worth hundreds of pounds
Chancellor Rachel Reeves wants Brits to invest more to help them build long-term wealth. We look at some places you can start, and get a free share as a cherry on top.
-
The best UK shares and funds as FTSE 100 hits new highs
Investors are benefiting as the FTSE 100 hits record highs - here are the best performing shares and funds so far this year
-
Just Group has the wind behind it – should you invest?
Just Group, a retirement products provider, is well placed to profit from a growing annuity market
-
Personal Assets Trust: a fund to protect your wealth
Personal Assets Trust aims to shelter its shareholders’ assets from volatile markets
-
Britain’s fallen stars: a second chance for quality stocks
Quality stocks in the UK saw share prices collapse in the wake of Covid. That has created an opportunity for smart public investors — and private buyers
-
Electronic Arts: a winning game group
Electronic Arts is a fast-growing video-game maker which looks set for further success
-
AJ Bell: a fine British fintech going cheap
Opinion Don’t overlook investment platform AJ Bell, a significantly undervalued British business with an excellent financial base
-
Microsoft’s partnership with OpenAI is on the rocks
Microsoft’s joint venture with OpenAI, the developer of ChatGPT, appears to be in trouble. What now for the two groups?
-
Carson Block on short-selling and what investors should watch out for when going long
Interview Renowned short seller Carson Block talks to Matthew Partridge about his specialism and where to go long
-
Drinks maker Diageo gets back on its feet – should you invest?
Diageo has faced one disaster after another over the past two years. Is it finally time to buy?