Salesforce Revenues: Will They Keep Activist Investors Away?

Salesforce deals with five powerful activist investors. A good way to get rid of these companies is to perform well, which drives up stock prices. Salesforce ticked that box with an excellent quarterly report this week, far exceeding street expectations.

It could save the beleaguered company some time, and it was certainly better than a bad report. But is that enough to keep activist investors at bay?

On the same day the company was due to report its results, one such campaigner, Elliott Management, said it would submit its own slate of board nominees, a move aimed at gaining enough voting control to impose his program.

With successful quarterly revenue of $8.38 billion, Salesforce is now under intense scrutiny for how it could lay off 10% of its workforce amid such a strong performance (and reports report that he paid actor Matthew McConaughey $10 million to act as a consultant). None of this looks great for Salesforce, especially as a company that markets itself as a responsible capitalist.

The executive suite finds itself caught between critics with conflicting agendas, while trying to run a business. It’s unlikely anyone will have any sympathy for CEO Marc Benioff and his team as they try to manage this gauntlet, but that’s their reality for now.

Will this week’s promising report fend off the activist investor hawks, who are tugging at the company and pushing it to cut costs even further? And is Salesforce managing to maintain the growth trend, especially with weaker growth forecasts for the next fiscal year and an uncertain economy?

One thing is clear: it’s probably not going to get any easier anytime soon.

Under pressure

We don’t know what activists are thinking as they seek to increase the value of their investments, but Elliott Management, which has invested billions of dollars in Salesforce, issued a statement after the earnings release saying it was satisfied, which is no small feat. .