Activist Investor Starboard Value Takes Significant Stake in Salesforce

Customer relationship management (CRM) software leader Salesforce has become a major player in the technology ecosystem in general, and a safe bet for investors of all types. It also boasts a market cap of $146 billion, which places it in the top 150 companies on the Fortune 500. Now, activist investment firm Starboard Value has taken a considerable stake in the company, and Jeff Smith, founder and chief executive, is optimistic about the significant opportunities yet to come for the CRM juggernaut.

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While Salesforce remains a mainstay for many businesses, it has underperformed its peers in the last three years, after a long span of revenue growth at a nearly 38% compound annual growth rate (CAGR). CEO Smith sees the current valuation discount as a prime motivator for long-term investment in the company. With a refreshed management team, including the addition of Bret Taylor as co-CEO, Salesforce is demonstrating a concerted effort to improve growth and profitability.

Additionally, Starboard has announced its significant investment in data monitoring and searching software company Splunk — a 7.8% stake, according to Reuters. Smith’s firm has a positive reputation as an activist investor that helps companies focus on operational efficiency and margin improvement.