Shares of Public Storage jump as activist Elliott Management pushes for change

Published Mon, Dec 14 202010:11 AM ESTUpdated Mon, Dec 14 20206:35 PM EST

Jesse Pound @/in/jesse-pound @jesserpound

(This story is for CNBC Pro subscribers only). Activist hedge fund Elliott Management is pushing for change at Public Storage , telling the company's board in a letter that recent changes were not enough and that more investment is needed to improve performance. Public Storage disclosed on Sunday that it had been engaged in discussions with Elliott , with the hedge fund nominating six new director's for the company's board. The company announced three new directors on Sunday, but the hedge fund said in a letter Monday that more change was needed. "We do not believe that the current Board of Trustees can lead Public Storage toward long-term success, even with the changes announced yesterday," the note said. The Wall Street Journal reported Elliott's stake in Public Storage on Sunday. Shares of the company were up more than 4% on Monday morning and closed up 2.6% on a down day for the S & P 500. The size of the investment was not disclosed. The hedge fund argued that the company has been falling behind its peers in the storage industry. Since the end of 2018, Public Storage's stock has gained 8.7%, compared with 22% for rival Extra Space Storage. As part of the letter, Elliott called for Public Storage to increase spending on its stores and employees and to improve its customer experience. "Through our time- and resource-intensive diligence process, we have concluded that Public Storage's underperformance derives from two main issues: (i) a failure to invest more aggressively in its strong asset base and (ii) lagging sales growth," the letter said. In response, the company released a statement detailing some of its recent investment and performance, saying that the board and management "are committed to serving the best interests of the Company and its shareholders, and will continue to take decisive action to drive sustainable value creation." Public Storage also announced an investor day scheduled for May 2021 on Monday, fulfilling one of the requests in Elliott's letter. Elliott, founded by billionaire Paul Singer, has a long history of activist investing. Some of its higher profile recent moves include AT & T and eBay .

Paul Singer, founder of Elliott Management, speaking at Delivering Alpha in New York on Sept. 13, 2016.

David A. Grogan | CNBC

(This story is for CNBC Pro subscribers only).

Activist hedge fund Elliott Management is pushing for change at Public Storage, telling the company's board in a letter that recent changes were not enough and that more investment is needed to improve performance.

Public Storage disclosed on Sunday that it had been engaged in discussions with Elliott, with the hedge fund nominating six new director's for the company's board. The company announced three new directors on Sunday, but the hedge fund said in a letter Monday that more change was needed.