Surging Coal Prices Sent Peabody Stock Rocketing. Its Largest Holder Trimmed Holdings.
Peabody Energy stock has soared more than five times in value this year. Elliott Management sold $30 million in shares.
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Peabody Energy stock has rocketed this year, and its largest shareholder has trimmed its position in the coal miner.
Peabody (ticker: BTU) shares have vaulted more than five times in value so far in 2021. By comparison, the S&P 500 index has gained nearly19%. Prices for thermal coal, which is used to generate electricity, rose to decade highs earlier this year. Coal demand has been picking up in the U.S., China, and Europe, although observers and executives think the resurgence can’t be sustained.Elliott Investment Management sold 1.8 million Peabody shares from Sept. 15-17 for $29.9 million, an average price per share of $16.66. According to a form the activist hedge fund filed with the Securities and Exchange Commission, Elliott now owns 27.1 million Peabody shares.
In a separate SEC filing, Elliott said it sold shares “for portfolio management purposes,” and pointed out that its entities “remain significant shareholders of the Issuer and [Elliott representatives] David Miller and Samantha Algaze remain” on Peabody’s board. Elliott remains Peabody’s largest shareholder with a stake of nearly 24%.Elliott didn’t offer a comment beyond the regulatory filings. Its representatives have been on Peabody’s board since February 2020.
At the end of July, B. Riley analyst Lucas N. Pipes lifted the target price on Peabody stock to $11 from $7, and maintained a Neutral rating after the company’s strong second quarter. Current coal prices could remain “elevated for longer,” Pipes wrote in a research report.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
