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Activist Elliott Management Takes Stake In Oracle

The hedge fund revealed to the SEC it purchased just more than $21 million in Oracle stock, a tiny share relative to Oracle’s market cap but potentially a signal of growing interest in the tech giant

Elliott Management, an activist investor with a unique track record of forcing massive shakeups at major tech companies, has taken its first position in Oracle.

The New York City-based hedge fund revealed to the U.S. Securities and Exchange Commission last week it had purchased 440,000 shares of Oracle stock valued at the time at $21,265,000 (and $23,386,000 at Monday’s price).

That’s a small position relative to Oracle’s roughly $167 billion market cap, but may signal Elliott’s interest in the Redwood Shores, Calif.-based company. Oracle declined to comment on the investment.

[Related: LogMeIn To Be Bought By Two Private Equity Firms For $4.3 Billion]

In the same SEC 13F form reporting its latest holdings to the securities regulator, Elliott revealed it had entirely divested from Citrix Systems—a prior investment in an established tech giant that serves as an example of Elliott’s ambitions and methods.

In June of 2015, Elliott disclosed a 7.1 percent stake in Citrix. A letter to the Citrix board soon followed demanding several changes in the virtualization software company’s leadership and business objectives.

The Citrix board ultimately entered a “cooperation” agreement with the hedge fund, which led to the exit of longtime CEO Mark Templeton and a spin-off of its GoTo line of products.

At the time, many in the Citrix ecosystem were concerned the company’s products and innovation would suffer as a result of Elliott’s demands. One Citrix partner, in an interview with CRN, called Elliott Management a “financial piranha” that forces deep cuts and generates chaos to drive its own profits.

But Elliott’s transformation plan proved successful—at least when assessing stock price.

Citrix was trading just above $50 a share in the summer of 2015. This month, as Elliott revealed its exit, Citrix stock smashed through previous records, briefly ascending above $150 a share before declining slightly.

The New York-based investment firm is run by Paul Singer. But the activist offensive is spearheaded by Jesse Cohn, an Elliott partner who has taken on high-profile roles in a wide range of technology companies including Riverbed Technologies, BMC Software and Symantec.

In 2017, Cohn launched an activist bid against channel giant Cognizant. Elliott pushed Cognizant into shifting its business before exiting the company at an almost 50 percent profit after 18 months.

Elliott is also a large investor in Dell Technologies, and famously came into conflict with Michael Dell over his plan to purchase VMware tracking stock as an entry back into the public markets.

Late last year, Elliott Management — with $40.2 billion in total assets— set its sights on AT&T, revealing a $3.2 billion stake in the Dallas-based telecom giant. The hedge fund quickly laid out a series of changes intended to boost AT&T's stock price.

In an open letter to AT&T, Elliott called into question the carrier's management team, as well as its aggressive acquisition strategy over the past several years that had not added to AT&T's core telecom business.

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