Salesforce (NYSE:CRM), the software giant, saw increased investor interest in the third quarter, fueled by a robust share price, as disclosed in recent regulatory filings. Sachem Head Capital Management augmented its stake in Salesforce by 33%, while Farallon Capital Management increased its holding by 30%, reaching 2.5 million shares by September 30.
Notably, these hedge funds had previously reduced their investments in Salesforce during the second quarter. Salesforce had faced activism earlier in the year, with prominent corporate agitators, including Elliott Investment Management, advocating for changes. In response, Salesforce implemented cost-cutting measures, intensified share buybacks, dismantled its mergers and acquisition committee, and reported stronger earnings, garnering increased investor support.
News of Mason Morfit from ValueAct Capital joining the board also helped quell some critics. Despite these positive developments, Starboard Value, the first activist to call for changes in October 2022, further reduced its stake by 14% to 1.7 million shares on September 30. Starboard had already trimmed its position by 20% in the second quarter.
While some investors not actively pushing for changes also reduced their holdings, such as Light Street Capital Management (down 44%) and Polen Capital Management (down 3.2%), Salesforce’s stock price continued its ascent, rising 64% since January and closing at $221.18 on Tuesday.
Although Salesforce experienced some stake adjustments during the third quarter, its overall appeal to investors remains strong, with its stock price serving as a key driver of ongoing investor interest.
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Author Stephanie Bédard-Châteauneuf 