Sep 4, 2019 - Economy

Box gets an activist investor

Jeffrey Smith, CEO of Starboard Value LP, speaks at the 5th annual CNBC Institutional Investor Delivering Alpha Conference on Wednesday, July 15, 2015.

Starboard Value CEO Jeffrey Smith. Photo: Heidi Gutman/CNBC/NBCU via Getty Images

Starboard Value, an activist investor, disclosed a 7.5% stake in Box, making it the cloud content management company's third-largest shareholder.

Why it matters: Because Box had become a Silicon Valley poster child for "good" corporate governance, last year eliminating the dual-class stock structure it had gone public with in 2015. But now Box is facing the exact scenario that dual-class structures were designed to protect against.

  • Box shares were up 8.2% at today's market open, increasing its market cap to $2.3 billion.

The bottom line: "Starboard tends to agitate for changes at companies, waging proxy battles if necessary," writes Barron's Avi Salzman.

Go deeper: Activist investors are poaching opportunities from private equity

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