Jeffrey Smith, CEO of Starboard Value LP and President of Papa John’s International Inc.
Brendan McDermid | Reuters
Starboard Value has taken a stake in Salesforce, with founder Jeff Smith saying significant opportunity remains in the business software maker, according to CNBC’s David Faber.
Dow component Salesforce rose more than 5% in early trading on Tuesday.
Salesforce shares are down more than 40% this year. The company in August gave a disappointing forecast for fiscal 2023, partly due to a negative impact from currency exchange.
Smith told Faber the bet is significant without specifying a dollar amount.
The hedge fund manager said the valuation discount on Salesforce stock right now is largely due to a “mix of growth and insufficient returns.” Smith added that the software company is not generating significant operating leverage relative to its peers in recent years.
Smith has remained a prolific activist investor even during the Covid pandemic, calling for change at Humana, Kohl’s, Mercury Systems and others.
Starboard’s CEO will be on CNBC at 10:15 a.m. ET to talk more about the new stake.
Starboard Value manages about $6.2 billion in assets, according to filings through the first quarter of 2020.