Elliott takes a multi-billion dollar activist stake in Salesforce

Elliott Management has built a multi-billion dollar position in Salesforce as another major activist investor joins the shareholder list of a software group facing calls to cut costs and improve its stock price.

The New York-based company joins fellow activist Starboard Value, who announced a stake in Salesforce in October with a call to increase profit margins. It was unclear what Elliott’s position is in the company and whether it has made any recommendations to the board of directors.

The activist effort will increase the pressure on Salesforce and its co-chief executive and co-founder Marc Benioff. The company has lost about $170 billion in market value since peaking in late 2021 amid tech sector cutbacks following a pandemic-induced boom.

“Salesforce is one of the most prominent software companies in the world, and by following the company for nearly two decades, we have developed a deep respect for Marc Benioff and what he has built,” said Jesse Cohn, managing partner at Elliott. in a statement. “We look forward to working constructively with Salesforce to realize the value befitting a company of its stature.”

Salesforce declined to comment. Elliott’s interest was first reported by the Wall Street Journal.

Earlier this month, Salesforce announced it would cut about 10 percent of its workforce to end pandemic hiring. The company added nearly 17,000 employees in 2021. The group is one of a number of Big Tech companies, including Alphabet, Amazon, Microsoft and Meta, that have announced sweeping job cuts in recent weeks amid an industry-wide slowdown.

“We hired too many people, which led to this economic downturn that we are now facing, and I take responsibility for that,” Benioff wrote in a letter to staff at the time. The company said it expected to incur $1.4 billion to $2.1 billion in costs related to the layoffs and restructuring.

The San Francisco-based enterprise software group has also had some high-profile departures from its management ranks. Co-CEO Bret Taylor announced in November that he would step down this month. Stewart Butterfield, the CEO of workplace tool Slack, which acquired Salesforce in July 2021, also confirmed last month that he would be leaving.

Elliott is one of the best known activists on Wall Street with a reputation for cracking down on technology companies. Under Cohn’s supervision, the company has grown to become one of the largest and most active software investors in the world.

Last year, Elliott helped acquire enterprise software specialist Citrix Systems and media ratings group Nielsen, two of the year’s largest leveraged buyouts, through its private equity unit Evergreen Coast Capital.

Elliott has the flexibility to build large activist public holdings and help arrange and participate in large private equity deals. Together with the buyout company Francisco Partners, it acquired non-core assets from Dell Technologies in 2016. Elliott has also partnered with a number of large private equity firms to round out LBOs.

Leave a Comment