Salesforce Shares Jump on Activist Investor's Big Stake

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published January 23, 2023
Key Speakers At 2017 The Dreamforce Conference

Michael Short & Bloomberg via Getty Images

Key Takeaways

  • Shares of cloud-based software company Salesforce (CRM) gained 3% on news that the activist investor firm Elliott Management took a large stake.
  • Elliott's move follows a position in Salesforce taken by hedge fund Starboard Value in October.
  • Salesforce recently announced cost-cutting measures including reductions in its workforce and real estate footprint.

Salesforce (CRM) shares rose 3% on reports that activist investor Elliott Management took a multi-billion dollar stake in the cloud-based software firm.

Jesse Cohn, managing partner at Elliott, praised Salesforce as "one of the pre-eminent software companies in the world," and said that, after following it for two decades, he has developed a "deep respect" for co-CEO Marc Benioff and what he has built. Cohn added that Elliott looks forward to "working constructively with Salesforce to realize the value befitting a company of its stature."

Elliot joins another activist hedge fund, Starboard Value, which announced in October that it had taken a position in Salesforce, and called on the company to increase its margins. Starboard claimed that Salesforce has not taken advantage of its position as an industry leader. Elliott didn't indicate what plans it may have for the company.

Job Cuts

The move comes less than three weeks after Salesforce said it was slashing its workforce by 10% and reducing its office space and real estate footprint in a cost-cutting move. Benioff explained then that the company had overhired during the COVID-19 pandemic tech boom, "leading into this economic downturn we're now facing."

Shares of Salesforce have fallen 28% in the last year.

Chart showing the percentage change in price of Salesforce Inc. (CRM) stock

Investopedia, YCharts
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Salesforce, Inc. "Form 8-K."

  2. Salesforce, Inc. "Letter to Employees."

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