Elliott builds $1.5-billion stake in Hewlett Packard Enterprise
A person with knowledge of the matter confirmed on Tuesday that hedge fund Elliott Investment Management had built up a stake in Hewlett Packard Enterprise worth more than $1.5 Billion.
Elliott, one the world's largest activist investors, is now among the biggest investors in the company and plans to engage the management, according to the person who wasn't allowed to discuss the campaign publically.
It was not immediately clear what Elliott might be trying to convince HPE, a company valued at 20 billion dollars, to do.
Bloomberg was the first to report on Elliott's campaign. This boosted HPE's shares by nearly 5%, to $14.98. The shares have fallen 30% year-to-date - four times as much as the S&P 500's 8% drop.
Elliott has been investing in technology for a long time. It has stakes in Dell Technologies, Salesforce and has served on the boards of many tech companies.
Hewlett Packard Enterprise (HPE) and Elliott have declined to comment.
Analysts consider the company, which manufactures servers for data centers that process large amounts of information to perform artificial intelligence tasks, as one of the most vulnerable companies from tariffs implemented by U.S. president Donald Trump. The company has faced margin pressures because of expensive production.
HPE announced in March a plan for cutting costs of about $350 millions by fiscal year 2027. This included reducing the global workforce to 5%.
The U.S. Justice Department has sued the company to stop the acquisition of Juniper Networks. They claim that the deal will eliminate competition, increase prices, and reduce innovation.
HPE CEO Antonio Neri indicated last month that this deal would still go through.
Elliott, which has $70 billion of assets under management, has continued to push forward with campaigns both in the United States as well as abroad this year, despite volatile market conditions that have forced other companies and corporate agitators alike to settle and find a common ground. In one of the most closely watched proxy battles in the industry, it is pushing for four seats on Phillips 66's board. Elliott owns a stake of nearly 5% in BP, and has built a stake at Sumitomo Realty & Development.
Elliott's campaigns have always been characterized by working with boards to replace management in companies that are underperforming. A person with knowledge of the matter has said that since 2022, fourteen CEOs have left their posts at companies where Elliott had a stake. Reporting by Svea Autumn-Bayliss, Arsheeya Bajiwa, and Rod Nickel in Bengaluru. Editing by Leroy Leo Tasim Zahid
(source: Reuters)
