Activist investor Elliott Management has snapped up a multi-billion dollar stake in Salesforce as the software firm is rattled by a slowdown in growth and slashes its headcount.
In a statement shared with City A.M. today, Elliott managing partner Jesse Cohn said Salesforce was “one of the preeminent software companies in the world” and Elliott had developed “a deep respect for Marc Benioff and what he has built”.
“We look forward to working constructively with Salesforce to realize the value befitting a company of its stature,” Cohn added.
Elliott has built a fearsome reputation globally for pushing through major changes in listed firms, with Glaxosmithkline and SSE among the firms to fall into its sights in the UK.
The group’s motives are so far unclear at Salesforce but the investment comes as the firm is rocked by a wider slump in the tech sector.
In a letter to staff earlier this month, Salesforce co-chief Marc Benioff said customers had been more “measured” in their purchasing decisions which led Salesforce to cut around 7,000 staff, or 10 per cent of its workforce.
The announcement of Elliott’s stake comes as Benioff’s co-chief Bret Taylor prepares to leave the firm at the end of this month.
The tech behemoth has seen its valuation tumble in the past 12 months, with shares trading down around 32 per cent. However, shares have ticked up over 16 per cent in the past month and jumped four per cent in pre-market trading on revelations of the news.
The Wall Street Journal first reported news of the deal.
Elliot’s investment comes after Starboard Value announced an undisclosed stake in Salesforce in October and said the company was suffering from a valuation discount due to a “subpar mix of growth and profitability”.
The firm has also reportedly faced troubles after its $27bn (£21.8bn) acquisition of office communications software Slack in 2021, with the two firms’ cultures reportedly clashing.