Elliott’s strategy is typical of activist hedge funds: Buy up a large chunk of stock in a company and then make demands, such as insisting the company sell off some of its assets to boost profits. The end goal, of course, is to drive the stock price up.
A good example of Elliott’s strategy in action is Citrix, which Elliott leaned on for most of the year. After Citrix shed 900 employees at the start of the year, Elliott demanded in June that the company make major changes to improve its share price. The following month, Citrix agreed to add Elliott executive Jesse Cohn to its board and explore the spinoff or sale of its GoTo suite of products.
Last month, Citrix announced the layoffs of 1,000 full- and part-time employees. Citrix also said at the time it would spinoff the GoTo product line, including the GoToMeeting conferencing software, into a new public company.
Elliott, which owns close to a 2 percent stake in EMC, had been advocating that EMC “unlock” the value in VMware by spinning off the subsidiary. The pressure led EMC to add two outside directors to the board in January, with Elliott’s blessing. And when Dell announced the EMC acquisition, the plan included breaking out VMware as a tracking stock.
Here’s a look at Elliott’s involvement with other technology companies in 2015:
- In June, Elliott increased its stake in Alcatel-Lucent, which led some to think that it planned to raise a ruckus over Nokia’s agreement to buy Alcatel-Lucent for $16.6 billion.
- At the start of the year, Elliott put in a $3 billion bid on Riverbed Technologies, which ultimately pushed Riverbed into a sale to a private equity company.
- Elliott followed that up by targeting Juniper Networks. In a compromise move in February, Juniper named two independent directors to its board after Elliott pledged it would support the nominations.
And it’s not just technology companies that fall under the watchful eye of Elliott. Elliott has reportedly targeted Cabelas due in large part to the outdoor retailer’s real estate holdings. Last month, Elliott Management named a co-chief executive, Jonathan Pollack, in order to have a line of succession in place when founder Paul Singer steps down.
In the meantime, it’s a safe bet that Elliott will continue to be a disruptive force in the technology sector next year.