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Goodyear Tire Surges after Activist Investor Takes Stake
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Goodyear Tire Surges after Activist Investor Takes Stake

Shares of Goodyear Tire (NASDAQ:GT) surged after activist investor Elliott Investment Management revealed a 10% stake in the company and expressed intentions to secure five board positions and push for the divestment of Goodyear’s company-owned stores. Elliott urges the tire manufacturer to explore ways to monetize the store network, undergo a thorough operational assessment, and concentrate on enhancing its profit margins.

The hedge fund is confident that if Goodyear follows these suggestions, the company could unlock value amounting to more than $21 per share. This value creation starts with the sale of Goodyear’s store network, which Elliot believes could result in a stock price increase of over $4 per share. The remaining value will be created with an in-depth analysis of Goodyear’s SG&A expenses, coupled with a revamp of its go-to-market and brand strategies, which could lead to a significant boost in operating margins.

A look at the past five trading days for GT stock highlights the level of impact today’s news had on it. Indeed, shares jumped over 17% at the time of writing. As a result, investors are now up 20% during this timeframe.

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