Business

Activist investor Elliott Management has a large stake in Salesforce


The hedge fund Elliott Investment Management has held a substantial stake in the activist in Sales force Inc., made its move after layoffs and stock plummeted at the enterprise software giant.

Elliott, who often pushes for strategic changes and seeks board representation, bought a multibillion-dollar stake in the company, according to a person familiar with the matter. The San Francisco company’s market capitalization is now $151 billion, down from a peak of more than $300 billion in 2021.

“Salesforce is one of the preeminent software companies in the world, and having followed the company for nearly two decades, we have developed a deep respect for Marc Benioff and what he has built.” Jesse Cohn, managing partner at Elliott said in a statement. . “We look forward to a constructive partnership with Salesforce to realize the value it deserves as a company.”

Benioff is the president and co-CEO of Salesforce. Elliott did not disclose details of his investment, which was first reported by The Wall Street Journal in the statement.

Paul Singer’s Elliott made a record $13 billion last year

Elliott, who has been involved in driving change at technology companies from Paypal Holdings Inc., Pinterest arrive western digital Corp., is the second most prominent activist investor in recent months to enter the stock. In October, Starboard Value bet within the company and said the company had problems turning growth into profits.

Salesforce said earlier this month it will cut about 10% of the workforce and reduce real estate holdings, after hiring too many people during the Covid pandemic when demand was high. The company at that time had about 80,000 people, indicates it is adjusting to more prudent spending of customers.

The sales force had nearly tripled its workforce in the previous four years, largely through dozens of acquisitions, including buy Slack in 2021 for $27.7 billion. From January 2020 to the end of October last year, the number of employees increased by more than 30,000 people.

“This is not surprising to us,” said Bloomberg Intelligence analyst Anurag Rana of Elliott’s move. “Salesforce’s valuation has plummeted since the company announced its acquisition of Slack, and since then, we’ve seen sales drop and many executives leave.”

Bret Taylor, who was the co-CEO of Salesforce, speak last year that he was leaving the company to get back into business. Taylor has been seen as the obvious choice if Benioff leaves Salesforce.

Rana added: “It is currently trading well below pre-pandemic levels. “Elliott’s involvement can help management focus on growing organic sales and expanding margins. We wouldn’t be surprised if there was a change at the top, similar to what Microsoft went through back in 2013.

–With support from Tom Giles.

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