Elliott’s AI Target Is an Omen to Stagnant Boards
The hedge fund has landed at server maker Hewlett Packard Enterprise. Its target has many vulnerabilities to activists —especially its stale boardroom.
Structural change.
Photographer: George/Archive Photos/Getty Images
Two of the best-known shareholder activists — Elliott Investment Management and Cevian Capital — are targeting companies with complex structures and second-rate governance. But even soft targets can be hard work.
The art of activism is to find a company that’s lost its way but has a good business at its core. The stock’s weak valuation may be a symptom of poor operating performance, which is in turn explained by the challenges of managing a conglomerate structure. Idiosyncratic governance is often a major concurrent factor. The board sets strategy, after all.