Starboard Value's Jeffrey Smith cuts EBay stake, bets big on software

Published Fri, Aug 14 20203:28 PM EDT

(This story is for CNBC Pro subscribers only.) Activist hedge fund Starboard Value slashed its stake in eBay by more than 70% in the second quarter after pushing the online auction platform to sell its noncore business, a regulatory filing showed on Friday. The hedge fund also revealed a few big bets on software companies. Starboard Value manages about $5.5 billion in assets as of 2019. Manager Jeffrey Smith spun the New York-based hedge fund out of investment firm Ramius in 2011. Here's a breakdown of the hedge fund's latest moves. Starboard decreased its investment in eBay to 2.09 million shares, or worth about $109 million, from 5.83 million shares by the end of June, a 73% reduction. Last month, eBay agreed to sell its classified-ads business to Norway's Adevinta for $9.2 billion in cash and stock amid pressure from Starboard as well as another activist investor Elliott Management. Starboard had nominated four directors to the board of EBay to urge the company to shed its classifieds unit. Shares of the e-commerce company have rallied this year as it benefited from a surge in online shopping amid coronavirus-driven lockdowns. The stock soared 74% in the second quarter and another 7% this quarter, bringing its 2020 gains to 56%. Here's a look at Starboard's top 10 holdings as of the end of the second quarter. Cybersecurity software company NortonLifeLock was Starboard's biggest equity stake by the end of June, the regulatory filing showed. The firm trimmed the stake by about 10% to about 24 million shares worth $477.60. The hedge fund also held a sizable stake in CommVault Systems , a software company focused on data protection and data management. Meanwhile, Starboard upped its stake in payment systems company ACI Worldwide by more than 40% in the second quarter. The hedge fund disclosed it owned 2.065 million shares, or worth about $55 million, by the end of June, up from 622,000 shares in the previous quarter. After dropping more than 30% in the first quarter, ACI Worldwide bounced 11.7% in the second quarter as business started to recover from the coronavirus impact. The stock has gained nearly 14% in the current quarter. Smith remains a prolific activist investor even during the pandemic. In its second public fight this year, Starboard is pushing to take control of GCP Applied Technologies to help the chemical maker navigate the crisis.

(This story is for CNBC Pro subscribers only.)

Jeffrey Smith, CEO of Starboard Value LP and Chairman of Papa John's International Inc.

Brendan McDermid | Reuters

Activist hedge fund Starboard Value slashed its stake in eBay by more than 70% in the second quarter after pushing the online auction platform to sell its noncore business, a regulatory filing showed on Friday. The hedge fund also revealed a few big bets on software companies.

Starboard Value manages about $5.5 billion in assets as of 2019. Manager Jeffrey Smith spun the New York-based hedge fund out of investment firm Ramius in 2011. Here's a breakdown of the hedge fund's latest moves.