Activist Starboard buys more Salesforce stock after first demanding change in 2022

Activist investor Starboard Value significantly increased its stake in Salesforce by nearly 50% in Q2, reaching 1.3 million shares, signaling renewed pressure on the software giant whose stock has declined almost 30% year-to-date. This move, revealed in a 13F filing, suggests Starboard, known for revisiting prior investments, may be re-engaging after earlier activist campaigns. Concurrently, Starboard also boosted its Pfizer holding by 10.5% while reducing its Autodesk stake by 27%.

Analysis

Regulatory filings from Q2 2024 reveal that activist investor Starboard Value has significantly increased its position in Salesforce (CRM), acquiring nearly 50% more shares to reach a total holding of 1.3 million. This move, which follows a 52% stake increase in the first quarter, signals renewed pressure on the software company, whose stock has declined nearly 30% year-to-date. Starboard's amplified investment is particularly noteworthy as it comes after other activists exited their positions in 2023 following operational improvements at Salesforce. The fund's history of re-engaging with companies perceived to be backsliding on performance, coupled with CEO Jeffrey Smith's prior statements on Salesforce's potential for greater efficiency, suggests a potential new campaign to unlock value. The 13F filing also disclosed other key portfolio changes, including a 10.5% increase in its Pfizer (PFE) stake and a 27% reduction in its Autodesk (ADSK) holding after a settlement, providing insight into the fund's current strategic focus.

Key Decisions for Investors

• Investors in Salesforce (CRM) should view Starboard's increased stake as a potential catalyst for strategic or operational changes, given the fund's activist track record and the stock's recent underperformance.
• The reduction in the Autodesk (ADSK) position following a settlement may signal that Starboard believes its primary value-creation objectives have been met, a factor for current ADSK shareholders to consider.
• While these 13F filings are backward-looking to June 30, the pattern of Starboard increasing its CRM and Pfizer (PFE) holdings suggests conviction in these positions, warranting closer monitoring for further developments or public commentary from the fund.