It’s been a rough period for shareholders of software provider Salesforce (CRM:NASDAQ) with the shares halving since November 2021.

Some relief came on 23 January after the Wall Street Journal reported activist investor Elliott Management had taken a multi-billion-dollar stake. The shares gained more than 2% adding to the 14% gains already notched-up in 2023.

Managing partner Jesse Cohn told Reuters ‘We look forward to working constructively with Salesforce to realise the value befitting a company of its stature.’

Elliott targets companies it believes have good fundamentals and prospects but where management have ‘dropped the ball’ causing the company to fall short on delivering its full potential.

The activist took a stake in pharmaceutical firm GSK (GSK) in April 2021. It pushed for management change and supported the demerger of consumer healthcare division Haleon (HLN) which was listed on the stock market in July 2022.

In the case of Salesforce Cohn said the company was ‘one of the preeminent software companies in the world’.

Elliott is the second activist investor to target Salesforce in the past year. In October 2022 Starboard Value announced a ‘significant’ stake. In an investor presentation the investor said it was pleased with the $50 billion 2026 sales target but was disappointed by the 42% operating margin target, considering a peer group average of 50%.

Like many technology companies which overexpanded during the pandemic Salesforce announced this month it was laying off around 10% of its workforce and closing some offices.

Elsewhere, hedge fund and activist investor Oasis Management has taken a 5% stake in Wagamama and Frankie & Benny chain owner Restaurant Group (RTN) according to a Financial Times report (20 January). The stake was purchased in November 2022.

The Hong Kong-based investor last hit the headlines in the UK after building a near 20% stake in Mr. Kipling cake maker Premier Foods (PFD) and campaigning to oust its CEO.

Hospitality was one of the worst-hit sectors during the pandemic while the cost-of-living crisis has hampered Restaurant Group’s recovery. Rising interest rates have also provided a challenge.

Restaurant Group extended its borrowing facilities in December by two additional years out to April 2028 and has agreed extra headroom with lenders to operate with a higher debt to EBITDA (earnings before interest, tax, depreciation, and amortisation) ratio.

In addition, the company has capped its interest costs to reduce the risk of interest changes over the next four years. The revised debt package means the firm had upwards of £140 million of cash headroom as at 21 December.

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