Last week activist investor Starboard delivered a public letter rebuking Box for what it perceives as underperformance. Today the firm, which owns 8% of Box stock, making it the company’s largest stock holder, took it a step further with an official slate of four candidates it will be putting…
Last week activist investor Starboard delivered a public letter rebuking Box for what it perceives as underperformance. Today the firm, which owns 8% of Box stock, making it the company’s largest stock holder, took it a step further with an official slate of four candidates it will be putting up at the next stockholder’s meeting.
While the company rehashed many of the same complaints as in last week’s letter, this week it explicitly stated its intent to run its own slate of candidates for the Box board. “Therefore, in accordance with the Company’s governance deadlines and in order to preserve our rights as stockholders, we have delivered a formal notice to Box nominating four highly qualified director candidates (the “Nominees”) for election to the Board at the Annual Meeting,” Starboard wrote in a public letter to Box.
Box responded in a press release that the Board as currently constituted categorically rejects this attempt by Starboard to take over additional seats.
“The Box Board of Directors does not believe the changes to the Board proposed by Starboard are warranted or in the best interests of all stockholders. The Box Board has been consistently responsive to feedback from all of its stockholders, including suggestions from Starboard, and open-minded toward all value enhancing opportunities. Furthermore, Starboard’s statements do not accurately depict the progress Box has made,” the Board wrote in a statement this morning.
Box further points out that the company overhauled the Board last year with three new board members specifically receiving Starboard approval.
What is driving Starboard to take this action? Like any good activist investor it wants a higher stock price and is seeking more growth from Box. Activist investors often come in and try to extract value by brute force when they perceive the company is underperforming. The end game, were they to be successful, could involve removing Levie as CEO or more likely selling the company and grabbing its profit on the way out.Activist investor Starboard Value makes official bid for Box board seats in letter View Story