Sources: activist investor Elliott Management acquired a multibillion-dollar Salesforce stake; a partner says the firm has “a deep respect for Marc Benioff”
Elliott Management makes a multibillion-dollar investment in the business-software provider
Wall Street Journal
Context & Ripple Effects
Elliott’s investment begins a Salesforce-specific activist arc that later escalated to a proposed slate of Salesforce directors before Elliott withdrew rather than run its own candidates after reviewing the company’s results and growth plans. The initial stake matters because it put a prominent activist investor alongside Marc Benioff and Salesforce shareholders, despite Elliott signaling respect for the founder.
The episode also fits Elliott’s recurring use of sizable positions to press corporate priorities, including its reported SoftBank campaign for buybacks and improved governance and its later investment in Workday.
First-order effects
Elliott becomes a major Salesforce shareholder, giving the firm a direct financial stake and a platform to engage Marc Benioff, the board, and other investors.
Salesforce’s board and management face immediate scrutiny from an investor whose later actions showed it was prepared to seek board representation.
Second-order effects
The prospect of an Elliott campaign increases the value of Salesforce demonstrating credible operating and growth plans to shareholders; Elliott ultimately cited those factors when it chose not to nominate directors.
Other enterprise-software boards face a clearer warning that Elliott can move between companies in the sector, as its later Workday stake illustrates.
Third-order effects
If activist campaigns increasingly end in negotiated or self-directed operational plans rather than proxy fights, board oversight and investor communication become central competitive disciplines for enterprise-software companies.
Elliott’s Salesforce and later Workday positions point to shareholder activism becoming a recurring governance force across large business-software vendors, not a one-company event.
The trend: Large enterprise-software companies are becoming repeat targets for activist investors seeking influence through sizable equity stakes and potential board pressure.
Our bullish view of Salesforce remains that activism (Elliott takes big stake) spurs more pressure on margins and profits for Benioff & CRM. The cloud stalwart is in a strong position to capitalize on its installed base and solid growth prospects ahead (despite near term macro)
It is not clear yet what Elliott wants the company to do “We look forward to working constructively with Salesforce to realize the value befitting a company of its stature” - Managing partner at Elliott
Activist investor Elliott Management has made a multibillion-dollar investment in Salesforce $CRM (source: WSJ). It usually means change is on the way. Starboard Value, another activist investor, took a significant stake in October. Elliott managing partner Jesse Cohn: https://tw…
More layoffs coming as activists smell blood in the water... just might be a good time to build a portfolio of tech companies, which will be doing buybacks & cuts into the downmarket Nice setup... #jaytrading https://twitter.com/...
.@salesforce is one of the preeminent software companies in the world, and having followed them nearly two decades, we have developed a deep respect for @Benioff and what he has built.
There are only a few companies that could affort to buy $CRM. And they'd all face antitrust srutiny. But that doesn't mean they won't now try. Also possible that Elliott could push for divestment of some big acquisitions like Slack. More immediate issue is c-suite turnover.
SCOOP on @WSJdeals: Another activist investor has its eyes set on Salesforce. This time, it's Elliott with a multibillion-dollar stake in the business-software provider, according to sources. $CRM https://www.wsj.com/...
<sinister voice>"We look forward to working constructively with Salesforce to realize the value befitting a company of its stature"</sinister voice> https://twitter.com/...