Salesforce Stock (NYSE:CRM)
On Monday, activist investor Elliott Management and software giant Salesforce (NYSE:CRM) struck a deal that sees Elliott Management withdrawing their board room challenge. As a result, Salesforce stock surged.
Less than a month has passed since Elliott submitted a slate of board candidates. Over a week has passed since Salesforce revealed higher-than-anticipated financial results and promised additional cost reduction.
They stated in a joint statement, “Salesforce and Elliott vowed to maintain the fruitful working relationship they have created together.” Elliott announced it would not be moving through with director nominations.
Now valued at $190 billion, Salesforce announced that it would double its share buybacks to $20 billion and stop pursuing mergers and acquisitions. While the corporation continues to decrease expenses to increase profitability, it has recently hinted at the possibility of further layoffs.
According to a person familiar with the situation, these actions appeased Elliott. They enabled the activist, who invests more than $55 billion in assets and has successfully pushed for reform at firms ranging from eBay (NASDAQ:EBAY) to Suncor, to avoid a costly proxy war. Outside the statement, Elliott denied further comment.
Salesforce has been under pressure to improve operations for months, thanks to the efforts of investors like ValueAct, Inclusive Capital, and Starboard Value.
Elliott became the most recent activist investor in Salesforce stock in January, prompting the firm to appoint three new directors, including ValueAct CEO Mason Morfit.
Since activists started making their case for change with Salesforce more firmly in December 2022, the stock price has increased by 48%. On Monday, shares were mostly unchanged at $190.
Terminating the boardroom challenge at Salesforce is this year’s third event involving notable activist investors. Trian Fund Management, led by Nelson Peltz, dropped its bid for a seat on Disney’s board of directors after the business announced higher profits and a new direction.
With the addition of a third new director, Daniel Loeb’s Third Point dropped its challenge to Bath & Body Works. This means that the proxy battle at Illumina (NASDAQ:ILMN) posed by Carl Icahn is the most contentious of the year.
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