Activist investors in Salesforce spell good news for shareholders like us

Published Mon, Jan 23 20232:25 PM ESTUpdated Mon, Jan 23 20232:34 PM EST

Kevin Stankiewicz @in/kevinstankiewicz @kevin_stank

Pressure from activist investors is mounting at Club holding Salesforce (CRM). And that's a bullish development for shareholders in the enterprise software giant, which has seen its stock price flounder for more than a year. The latest investment firm to target Salesforce is hedge fund Elliott Management, which has amassed a multibillion-dollar stake in the company, CNBC confirmed Monday. News of Elliott's investment in Salesforce was first reported by The Wall Street Journal . Elliott looks forward to "working constructively with Salesforce to realize the value befitting a company of its stature," Jesse Cohn, a managing partner at the firm, said in a statement. The hedge fund is known for its activism in the tech sector and, in the past, has taken seats on the boards of directors of companies such as Twitter, eBay (EBAY) and, most recently, Pinterest (PINS). Cohn served on both Twitter's and eBay's boards. As a result, the Club wouldn't be surprised to see Elliott push for representation on Salesforce's board, which is elected each year at the company's annual shareholders meeting, typically held in early June. Shares of Salesforce rose more than 3% Monday, to nearly $157 apiece. The gains add to the stock's strong start in 2023, up about 16%. However, shares remain down almost 50% from their all-time closing high of $309.96 a share, in November 2021. Elliott's investment in Salesforce comes roughly three months after activist investor Starboard Value disclosed a position in the company. Starboard has said it sees "significant opportunity" for Salesforce to expand its operating margins and become more profitable. Starboard — seemingly the first activist to publicly target Salesforce — has centered its campaign for a business restructuring largely on concern over a "subpar mix of growth and profitability," which has weighed on the company's valuation. More broadly, growth-oriented tech stocks like Salesforce have struggled over the past 14 months, since the Federal Reserve moved to dramatically raise interest rates in response to the hottest U.S. inflation in decades. Salesforce has been squeezed b