Wall Street’s Most Feared Hedge Fund Just Showed Up at BP’s Door… And Caused The Stock to Go Higher?

Everyone loves a good takeover. Especially if you’ve ever watched Succession, or any given season of Billions. One day you're running the show, the next, some guy in a custom suit marches in and starts pointing at chairs saying, "You're out, you're out, maybe you stay."

BP might be living that script in real time. Shares of the 120-year-old British oil giant jumped 8% this morning (its biggest gain since 2020) after reports leaked that Elliott Investment Management, the activist hedge fund known for giving corporate boards sleepless nights, has taken a stake.

For those unfamiliar, Elliott Investment Management, the activist hedge fund led by billionaire Paul Singer, is the Tom Brady of Wall Street. Known for muscling its way into companies, it has a track record of forcing leadership… just ask AT&T, Twitter, or SoftBank. Now, BP is on its radar, and if history is any guide, a major corporate “restructuring” could be on the way.

(Source: Sempre Milan)

BP’s stock has been dragging its feet while rivals like Shell and Exxon are running along like prime Usain Bolt. Over the last year, BP has slipped nearly 9% while Shell gained 6% (which, in oil industry terms, is basically getting lapped). Worse, BP’s market value is sitting at a sad-looking $91.87 billion, a full third below Exxon and Chevron when compared on an earnings basis.

BP hasn’t exactly been making things easy for itself. It’s been one faceplant after another. In 2023, it had to fire its CEO Bernard Looney for “serious misconduct”. Before that, Looney was all in on BP shifting away from fossil fuels and into renewables, and as you’d imagine, investors weren’t sold. BP has since tried to take it back under new CEO Murray Auchincloss, but as One Republic famously said: “It’s too late to apologize…”

That’s where Elliott comes in… And when Elliott enters, things get loud. Analysts are already expecting Elliott to demand a leadership shakeup, with chairman Helge Lund likely the first one booted off the island. Beyond that, the hedge fund will almost certainly push BP to stop playing around with wind farms and start prioritizing oil and gas. That means selling off low-margin green energy assets, focusing on bigger shareholder returns, and dialing back on those climate-friendly press releases. If BP drags its feet, history suggests Elliott won’t hesitate to twist a few arms. Remember, this is the same hedge fund that spent over a decade suing an entire country (Argentina) over unpaid debts… and won. So this BP boardroom war is like child’s play.

The timing of Elliott’s move couldn’t be better (or worse, if you’re BP’s current leadership). The company is set to release its fourth-quarter earnings tomorrow, giving investors their first real chance to see if Auchincloss has a convincing plan or if he’s about to get steamrolled like a freshman intern who walked into the wrong meeting.

And behind the scenes, the sharks are already circling. There’s growing speculation that BP could even become a takeover target, with rival energy giants reportedly running the numbers on what a buyout might look like. For now, BP shareholders are just enjoying the rare sight of their stock price actually going up for once. Whether that’s because Elliott is here to fix things or because everyone smells blood in the water is still up for debate. Either way, things are about to get very interesting.

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Stock.News has positions in Exxon.