According to the Wall Street Journal, cloud software company Salesforce has received a multi-billion dollar investment from hedge fund Elliott Investment Management. To realize the value appropriate for a firm of Salesforce’s scale, Elliott added, “We look forward to working constructively with Salesforce.” The market value for Salesforce is currently $151 billion, down from a high of nearly $300 billion in 2021.
After Salesforce Inc. layoffs and a severe price decline, hedge fund Elliott Investment Management has acquired a large activist interest in the business software company.
According to a person familiar with the situation, Elliott, which frequently pushes for strategy changes and demands board involvement, purchased a substantial investment in the business. The market value for the San Francisco-based corporation is currently $151 billion, down from a peak of more than $300 billion in 2021.
Salesforce is one of the top software firms in the world, and after following the company for almost 20 years, managing partner at Elliott Jesse Cohn said, “We have developed a strong admiration for Marc Benioff and what he has achieved. To realize the value appropriate for a firm of Salesforce’s scale, we look forward to working constructively with them.
Benioff is chairman and co-chief executive officer of Salesforce.
In the statement, Elliott made no mention of the specifics of its transaction, which was first reported by The Wall Street Journal.
Elliott, owned by Paul Singer, earned a record $13 billion last year.
Elliott is the second well-known activist investor to purchase the stock in recent months. Elliott has been involved in promoting reforms at tech businesses including Paypal Holdings Inc., Pinterest Inc., and Western Digital Corp. Starboard Value bought a stake in the business in October and claimed it had problems turning growth into profitability.
Salesforce announced earlier this month that it would shrink its real estate holdings and slash roughly 10% of its workers after overstaffing during the Covid epidemic as demand spiked. The business, which at the time employed 80,000 people, declared it was modifying to clients’ more cautious spending.
In the previous four years, Salesforce has nearly tripled its workforce, thanks in large part to dozens of acquisitions, including the $27.7 billion purchase of Slack in 2021. The number of employees increased by more than 30,000 from January 2020 to the end of October in the previous year.
Bret Taylor, who had previously served as Salesforce’s co-CEO, announced last year that he would depart from the organization to resume his entrepreneurial endeavors. If Benioff ever left Salesforce, Taylor had been considered the logical choice.
Rana continued, “It is now trading far below its pre-pandemic values.”
“Elliott’s engagement could aid management in concentrating on both profit expansion and organic sales growth. If there is a change at the top as well, comparable to what Microsoft underwent in 2013, we won’t be surprised.
