Lululemon Athletica (LULU) surged 5.01% intraday following news that activist investor Elliott Investment Management has built a stake exceeding $1 billion in the company and is pushing for a new CEO.
Elliott Management, known for its activist campaigns, is reportedly working with former Ralph Lauren executive Jane Nielsen as a potential CEO candidate to help turn around the athletic apparel retailer. The move comes after Lululemon announced last week that CEO Calvin McDonald would step down without naming a successor.
Investors reacted positively to the news, viewing Elliott's involvement and potential leadership change as a catalyst for improving the company's performance. Lululemon had recently raised its annual profit forecast, but the lack of a clear successor had raised concerns.