Salesforce acts with five powerful activist investors. One way to get these companies off your back is to perform well, which drives up stock prices. Salesforce checked that box this week with a stellar quarterly report, beating street expectations by far.
That might buy some time for the beleaguered company, and it certainly was better than a bad report. But is it enough to keep activist investors at bay?
On the same day the company was due to report earnings, one of those activists, Elliott Management, indicated it would present its own list of candidates for the board of directors, a move aimed at gaining enough vote control to advance its agenda. lay.
With a successful quarterly revenue of $8.38 billion, Salesforce is now under scrutiny on how it can lay off 10% of its workforce amid such stellar performance (and news reports it paid actor Matthew McConaughey $10 million acting as an advisor). None of this looks good for Salesforce, especially as a company promoting itself as one responsible capitalist.
The executive suite finds itself among critics with conflicting agendas as they try to run a business. It’s unlikely anyone will have any sympathy for CEO Marc Benioff and his team as they try to solve this gauntlet, but for now it’s their reality.
Will this week’s promising report fend off investor activist hawks, who are hunting the company and pressuring it to cut even more costs? And will Salesforce manage to maintain the growth trend, especially with lower growth guidance for next financial year and an uncertain economy?
One thing is clear: it probably won’t get any easier anytime soon.
We don’t know what the activists think when they want to increase the value of their investments, but Elliott Management, which invested billions of dollars in Salesforce, has a rack after the earnings came out, it indicated that it was satisfied, which is no mean feat.