Jeffrey Smith, CEO of Starboard Value LP and Chairman of Papa John’s International Inc.
Brendan McDermid | Reuters
Starboard Value LP has taken a stake in Salesforce, with founder Jeff Smith saying a significant opportunity remains in the enterprise software maker, according to CNBC’s David Faber.
Dow component Salesforce jumped 7% in premarket trading on Tuesday.
Shares of Salesforce have fallen more than 40% this year. In August, the company gave a disappointing forecast for fiscal 2023, partly due to the negative impact of foreign currency.
Smith told Faber the stake was substantial, without specifying a dollar amount.
The hedge fund manager said the valuation discount on Salesforce shares right now is largely due to an “insufficient mix of growth and yield.” Smith added that the software company has not generated significant operating leverage compared to competitors in recent years.
Smith remained a prolific activist investor even during the pandemic, calling for changes 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 bet.
Starboard Value manages about $6.2 billion in assets, according to filings through the first quarter of 2020.
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