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Elliott Management fund makes multi-million dollar investment in Salesforce and becomes majority shareholder

The news was released on January 22 by the Wall Street Journal, which revealed the millionaire participation of the North American investment fund Elliot Management to save the cloud software company Salesforce from the serious crisis in which it finds submerged

The widespread recession that affects the whole world, and especially large technology companies, is being seen by large investors as a unique opportunity to make strategic master moves. Elliott Management happens to be one of the fifteen largest shareholders of Salesforce and to take a notable position on the board of directors of the company with a multi-billion dollar stake.

Although neither the actual figures of the transaction nor the causes have been disclosed, Elliott’s managing partner, Jesse Cohenhas told Reuters that they look forward to working constructively with Salesforce to obtain the value that corresponds to a company of this size within the IT sector.

Tense Times for Salesforce

Salesforce is valued at $151.3 billionclosing the day on January 20 with a revaluation of its assets of more than 3%. Despite everything, this is the second time in the last quarter that an activist company has taken a stake in the company, the last being Starboard Value in October. And it is that if we compare it with the figures for 2021, we see how a peak of more than 300,000 million dollars.

The data has not been revealed, but according to CNBC, Salesforce could be experiencing a situation of some tension derived from the combination of a poor growth with his poor profitability.

It is a situation that contradicts the good figures it obtained between January 2020 and October 2022, when its workforce grew by more of 30,000 workers and had uploaded dozens of acquisitions like the one from slack in 2021 for 27.7 billion dollars. However, perhaps that was the turning point for the company’s slowdown to begin and the departure of many of its managers.

All this has led to a unbridled decline of their actions and in the announcement at the beginning of the year of the cut your workforce by 10% of the 80,000 employees it currently has. Salesforce is forced to close some of its offices after the good numbers experienced during the pandemic in which hiring rose considerably. But the situation is very different now, and in the midst of the economic slowdown, they now have an inflated and excessive labor force.

Elliott Management, to the rescue of IT

It is not the first time that we see how the investment giant is committed to being part of the shareholding of technology companies. Therefore, after the recent new position on the board of directors of pinterestin such a way that Elliott’s portfolio manager (Marc Steinberg) became the new director, now they are betting on one of the most important software companies in the world.

Elliott Management claims to have been on the trail of Salesforce for the last two decades, so it can boast of having a perfect knowledge of business dynamics and current trends in the technology market. The objective is clear; work to give Salesforce back the position it truly deserves.

To talk about Elliott is to talk about an investment fund that, in addition to the aforementioned Pinterest, has collaborated with other technology companies such as Paypal Holdings either Western Digital Corporation. Such is its situation, that in 2022 it reached an investment record of 13,000 million dollars.

All indications are that Elliott Management’s involvement could help Salesforce focus on organic sales growth and margin expansion. However, it could also come hand in hand with a change at the top, similar to the one experienced by Microsoft in 2013.

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