What's going on?

Reports out on Monday show activist investor Elliott Management has got its teeth into Salesforce.

What does this mean?

Poor old Salesforce has hit a slump. Sure, the firm�s not quite moping around in its PJs all day and eating Ben and Jerry’s from the tub, but it has let itself go: growth�s gone all slack, and the company�s market value has fallen to about half its 2021 peak. And now the down-on-its-luck firm�s caught the eye of activist investors � that�s plucky financiers who buy chunks of companies to dust them off, spruce up operations, and ultimately boost share prices. Big-name Elliott Management has reportedly grabbed a multi-billion-dollar slice of the Salesforce pie, following in the footsteps of fellow activist Starboard Value, which claimed a stake in October. That�s going to pile a whole lot of pressure on Salesforce�s management team, an idea investors seemed to like: they sent the firm�s shares up when news broke.

Why should I care?

The bigger picture: Activism�s on trend.
Elliott�s stake in Salesforce is part of a new wave of activist investing that�s sweeping hard-hit global markets. Case in point: by Bloomberg�s count, a massive 177 activist campaigns were announced last quarter � the most since 2018. And we�re not just talking about small fry: along with Salesforce, other giants like Disney and Bayer have been targeted in recent months too.

Zooming out: Unwanted attention.
Being courted by an activist investor is no bed of roses. After all, any activist�s main goal is to boost shareholder returns � and that doesn’t always mean improving the company�s fate in the long run. In fact, research shows that a company�s value tends to spike the year after it�s targeted, only to drop off compared to its �untargeted� peers over time. And that�s not to mention the fact that activists tend to nix companies� long-term investments and efforts at corporate responsibility�