Feeds

Look behind you, NetApp: Angry investor is coming for YOU

First Xyratex, then Emulex and Brocade... now Elliot's stalking a storage giant

Next gen security for virtualised datacentres

Activist investor Eliott Management, of Emulex fame, always pushes to have its voice heard - especially when it thinks bosses of its "investment companies" don't put shareholders first. Now the fund has actually taken on storage giant NetApp.

According to a Bloomberg report, Elliott is pushing NetApp to change its board. We can only imagine exec chairman Dan Warmenhoven's volcanic reaction.

Apparently Elliott and NetApp have been talking for some weeks, with Elliott suggesting a new set of directors. The investor actually holds less than five per cent of NetApp's shares but may increase its holding.

Stifel Nicolaus analyst Aaron Rakers writes: "Elliott was listed as holding only ~1.151 million shares (0.3 per cent of stock/outstanding) as of 3/31/13 filings."

Why is NetApp vulnerable to this sort of exercise? Two words: shareholder value. The shares peaked at $60.60 on 11 February, 2011 and have been worth less than $40 for the past 12 months.

NetApp doesn't pay a dividend but has been re-purchasing its shares, as Rakers writes: "While we are somewhat suspect of NetApp’s willingness to initiate a dividend strategy, we do believe a more active return of cash to shareholders is warranted. NetApp exited its January 2013 quarter with a outstanding share repurchase authorisation of $1.033 billion."

NetApp shares jumped 6.5 per cent on the news of Elliott's involvement, to $38.51. The company's fourth quarter and full year results are being reported on 21 May next week. Expect fireworks in the earnings call. ®

Build a business case: developing custom apps

Whitepapers

Best practices for enterprise data
Discussing how technology providers have innovated in order to solve new challenges, creating a new framework for enterprise data.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?