More Change Ahead for Salesforce as Activist Investor Buys Significant Stake

Activist investor Elliott Management makes multi-billon dollar investment in Salesforce.

It’s time for Salesforce to turn and face the strange as ch-ch-ch-ch-changes are afoot. Again.

With a recent round of layoffs and an ongoing executive exodus, it’s been a turbulent time at Salesforce — and the road may get a lot bumpier as another activist investor takes a significant stake in the CRM market leader.

The New York Times reported on Monday that Elliott Management Corp., a $55 billion hedge fund, now has “a significant stake in the company” — one that The Wall Street Journal is calling a multi-billion dollar investment.

Following the news, Salesforce shares rose nearly 6% today, changing hands at $157.67. While Salesforce shares fell nearly 40% last year, third quarter fiscal 2023 results reported revenue of $7.84 billion, up 14% year-over-year or 19% growth in constant currency.

Salesforce CEO Mark Benioff has yet to address the investment on Twitter, where his feed currently consists of a flurry of retweets related to environmental and climate issues. However, Jesse Cohn, managing partner at Elliott Management, tweeted today that his company looked forward to “working constructively with Salesforce.”


What Does Investment Means for Salesforce Customers?

Customers are fearing that the arrival of multiple activist investors will limit Salesforce’s innovation trajectory, according to R “Ray” Wang, principal analyst and founder of Constellation Research, Inc.

“Elliot’s known for forcing tech companies to make tough decisions on R&D investments and sales and marketing spend,” Wang said. “This comes as a critical point for Salesforce where key executives have departed, and the economy has softened.”

Over the past few months, several Salesforce executives announced their departure including Vice Chair and Co-CEO Bret Taylor, who announced he would step down effective Jan. 31, 2023. In the days that followed, Slack co-founder and CEO Stewart Butterfield said he was also leaving. Salesforce acquired Slack for $27.7 billion in 2021. Meanwhile Marc Nelson, CEO and president of Tableau — another Salesforce acquisition ($15.7 billion) in 2019 — resigned in December of 2022.

Board Shakeup After Executive Exodus

Salesforce board members serve one-year terms, with each seat up for re-election every year. Some current board members, including Benioff, have served for more than a decade. But that could all change with the arrival of Elliott Management — and a total board makeover may be in the cards.

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