PulteGroup CEO Dugas.
PulteGroup CEO Dugas.

CNBC on Tuesday reported, citing sources, that Elliott Management, a sometimes-activist investment firm, has taken a large stake in PulteGroup (NYSE:PHM). Shares of PHM shot up on the news, moving 5% at one point before settling in at $19.37, a bit more than a 4% gain on the day in the last minutes of trading Tuesday. Separately, OptionsMonster said the report ignited significant buying activity in short-term options on PHM shares expiring Friday. PHM shares were up another .75% in early trading on Wednesday.

Sources also said Elliott's stake is larger than 4 percent, but smaller than 5 percent. A stake of 5 percent or more would require a Securities and Exchange Commission filing.

The stake comes as CEO Richard Dugas is under fire from PulteGroup founder William Pulte and his grandson. Dugas has said he'll retire in May of 2017, but the two men are pushing for a faster succession.

Both men have been critical of PulteGroup's performance relative to its peers.
In a statement, Pulte said: "Elliott recently informed us that they have taken a position in the company. We welcome dialogue with all of our shareholders."

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