ValueAct increases Salesforce stake to nearly $1 billion


G. Mason Morfit, chief executive officer and chief investment officer of ValueAct Capital, speaks virtually during the Active-Passive Investor Summit in New York, U.S., on Tuesday, Oct. 18, 2022. 

Jeenah Moon | Bloomberg | Getty Images

Mason Morfit, Salesforce board member and co-CEO of activist investor ValueAct, has increased his stake in Marc Benioff’s software firm to just under $1 billion, acquiring $99 million worth of shares earlier this week, just days after the company reported its first revenue miss since 2006.

The trade was disclosed in a regulatory filing Thursday, sending Salesforce shares up around 3.5% on the news in morning trading.

ValueAct’s increased investment is a potential sign of confidence in Benioff and the company, which reported fiscal first-quarter earnings in late May that missed analyst expectations. The miss, coupled with weaker-than-expected guidance, sent shares tumbling as much as 17%.

Morfit was appointed to Salesforce’s board in 2023, as the company contended with several other activist investors dissatisfied with CEO Benioff’s high-cost acquisition habit, the company’s underperforming stock, and a headcount that the dissidents saw as bloated.

Benioff and the company took rapid action to fend off the activists, implementing deep layoffs, dissolving Salesforce’s board-level M&A committee and ultimately producing a blowout earnings report that staved off the possibility of a board reshuffle.

The other activists eyeing Salesforce at the time included Elliott Management, Dan Loeb’s Third Point, and Starboard Value. Elliott submitted a slate of directors for election at Salesforce’s annual meeting, before withdrawing the slate in the wake of Salesforce’s turnaround.

There are indications nonetheless, that Benioff has begun to consider growth via acquisitions once more. Earlier this year, Salesforce’s widely reported pursuit of data management firm Informatica sent shares see-sawing before the putative target said it was not considering a sale.

Morfit has led ValueAct’s investments since 2020 when founder Jeff Ubben stepped back from the firm. He was previously on the board at Microsoft and has earned a reputation as a constructive investor willing to work with management to improve companies.

Earlier this year, Morfit publicly backed Disney CEO Bob Iger as the entertainment firm grappled with a proxy fight led by Trian’s Nelson Peltz and former Marvel executive Ike Perlmutter.

Salesforce shares briefly eclipsed their previous 2021 highs earlier this year, but have since given back those gains and are down 4% year-to-date.

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