Why BP Is Rallying Today

Major UK-based oil producer BP (BP) is advancing 6% today after an activist investor reportedly acquired a meaningful stake in the firm. Moreover, the investor, Elliott Investment Management, will try to get the company to implement changes in an effort to boost BP stock, a report stated.

Possible Changes That Elliott May Seek After BP’s Underperformance

Elliott has obtained a meaningful stake in BP, Bloomberg reported, without naming the size of the investor’s holding.

A row of massive oil rigs in a desert landscape, against a setting sun.

RBC, a Canadian bank, speculated that Elliott could push BP to recruit a new chairperson, while investment bank Jefferies theorized that the investor may pressure the oil giant to sell its environmentally friendly assets.

In the last five years, BP stock had fallen 8% as of last week, while a number of its large Europe-based oil peers had climbed around 30% over the same period. Moreover, BP’s shares had sunk nearly 25% in the previous two years.

Takeover Speculation

Prior to the report about Elliott’s stake, there had been speculation that, due to the low valuation of BP stock, the company could become a takeover target.

The Recent Performance of BP Stock

In the last month, the shares have risen 10%, while they have gained 19% in the last three months.

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Disclosure: None. This article is originally published at Insider Monkey.