What's going on?

Nestle�s stock price hit a record high on Monday (tweet this) after a well-known US investor said he had bought a $4 billion stake in the company and wanted to see some new strategic initiatives implemented.

What does this mean?

Nestle has already seen a number of big changes this year � a new CEO took over in January and announced substantial changes to the way the company does business, including the possible sale of its American candy business and a move towards investing in healthier foods.

However, the big investment by American investor Daniel Loeb might just accelerate the pace of that change. The purchase makes Loeb one of Nestle�s biggest and most influential shareholders, and Loeb has already called for a raft of changes (see below). For its part, Nestle has coolly acknowledged Loeb�s demands and said that they already align with their new CEO�s existing vision for change.

Why should I care?

For markets: Nestle shareholders seem to like Loeb�s ideas.

Loeb wants Nestle to sell its holdings in businesses that aren�t core to its operations, like its 23% ownership of cosmetics company L�Oreal. He also wants Nestle to borrow more money and use it to buy its own stock, which would help push up the stock price. Investors sent Nestle�s stock up almost 5% on Monday, suggesting they are optimistic that these (likely) profitable changes will be implemented.

The bigger picture: Americans are turning up the heat on some big European companies this year.

A few months ago, Kraft-Heinz tried to take over consumer goods giant Unilever. The idea was that Kraft-Heinz would run the company more profitably by stripping out costs and borrowing more money � which would increase returns for Unilever shareholders. While the situation with Nestle is obviously different, the rationale of Loeb�s investment is similar � and another sign that some big European companies are facing pressure to become more ruthless in their corporate strategies.