Elliott Management is a fierce activist hedge fund that no CEO wants to pick a fight with. In its history, it’s waged activist campaigns against the leadership of many publicly-traded companies and picked up a significant number of victories to its name. In fact, it’s also done so with nation-states, famously once seizing a ship owned by the Argentine government to pressure the country to redeem its bonds.

• In its latest activist campaign, Elliott appears to be pressing upon Citrix (NASDAQ: CTXS), a company that makes software tools used for remote desktop access to servers hosted online. A legacy software company from the 1990s, Citrix like many of its kind has had issues transitioning towards a subscription-based business rather than specified contracts and from on-site computing towards cloud computing.

• Now, Elliott and Citrix aren’t new to each other. The activist fund began pressing the company back in 2015 when it bought a 7% stake, demanding that it made changes with the goal of increasing its stock price. Waging against Citrix’s board, Elliott oversaw the ouster of its then long-time CEO, Mark Templeton, and brought in a replacement to fix things its way. 

• Last year, it looked like Elliott was satisfied with its campaign at Citrix when it gave up a board seat held by its chief activist campaigner, Jesse Cohn, but it now appears that wasn’t exactly the case. This time around, the hedge fund has built a stake of over 10% in the company and is pressing for fresh changes, per The Wall Street Journal.

• It’s said that Elliott recently notified Citrix’s board of its sizeable stock position and wants the company to take action to boost its dragging stock price. Even as the pandemic benefitted Citrix’s business, the company’s stock price hasn’t fared so well over the past year and even the years before that. For example, its stock is down 17% year-to-date.

• Really, Citrix looks like a target for activist hedge funds with the way it’s fared over the years, but not all activist funds are as pressing and aggressive as Elliott. This time, the fund’s exact demands aren’t yet known but given historical context, it’ll likely push for major changes.

• Now, Citrix is the fresh target for Elliott, which has over $70bn under management and much willpower to push for changes. This year, the spotlight for the fund is its campaign against pharma giant GlaxoSmithKline (GSK), calling on it to make strategic changes including considering the replacement of its CEO.

• Before GSK, Elliott also recently pushed for changes at Dropbox after it bought a sizeable stake in the online file storage company. While it has a stable business, Dropbox’s growth is lagging and stock performance also lagging, making it the typical target for activist investors.

Photo: Elliott Management Co-CEO Paul Singer, credit: World Economic Forum, licensed under CC BY-NC-SA 2.0

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