Can Elliott Management Save Aerojet Rocketdyne (AJRD) Stock?

  • Elliot Management purchased a 3.7% stake in U.S. rocket engine maker Aerojet Rocketdyne (AJRD).
  • This equity purchase comes just months after a series of failed takeover attempts from others.
  • AJRD stock has seen renewed interest since the Elliot investment, trending up 6% this week.
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Aerojet Rocketdyne (NYSE:AJRD) stock is receiving some additional attention today on news that Elliott Investment Management recently purchased substantial equity in the rocket maker. Elliott now owns a 3.7% stake in AJRD stock, adding to the fund’s rolodex of acquisition interests.

Known for being one of the only independent U.S. rocket makers left, Aerojet has been in flux this year. For one, the company underwent something of a civil war this past January when former Chairman Warren Lichtenstein attempted a hostile takeover via his hedge fund, Steel Partners (NYSE:SPLP).

This takeover ended in strife, as Lichtenstein and CEO Eileen Drake exchanged heated public missives slandering each other’s integrity and competency. Per a statement from Drake in May, Lichtenstein and Steel Partners have continued to pursue a takeover of Aerojet, even as Drake levies grave reprimands.

This news also ended up leading the way for yet another failed Aerojet takeover attempt from Lockheed Martin (NYSE:LMT) in February. The Lockheed takeover failed as a result of antitrust pushback.

Elliott Management may be the light at the end of the tunnel AJRD stock has been waiting for, however.

AJRD Stock Sees Uptick on Elliot Stake

Elliot has been one busy hedge fund lately. In the past month, the company has sold off most of its ownership in SoftBank (OTCMKTS:SFTBY), revealed sizable stakes in Pinterest (NYSE:PINS) and PayPal (NASDAQ:PYPL) and of course bought Aerojet stock.

The firm has had a historic interest in defense companies, something the fund certainly hasn’t shied away from this year. Elliot even placed a bid for defense electronics maker Mercury Systems (NASDAQ:MRCY) in March.

Elliot’s stake in AJRD stock could reflect a renewed interest and faith in the rocket company. Even amidst a relatively cold year for stocks, shares of AJRD are only down about 5% so far this year. That’s mostly the result of a cold first quarter. In fact, Aerojet stock is up more than 20% in the past six months.

Since news broke of Elliot’s purchase of AJRD, the stock has seen something of a jump. Shares are up 6% over the past five days as investors speculate about the nature of the new investment. Although Elliot is known for its activism in much of its ownership stakes, its relationship with Aerojet is currently passive. Whether this ends up being the beginning of an upswing for shares remains to be seen.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

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