Starboard Value and Box are about to duke it out

Activist investor firm Starboad Value and its managing member Peter Feld are none too happy with the way that Aaron Levie is running Box. In a letter to shareholders they announced that they will be looking to get more seats on the company’s board of directors and, quite frankly, to interfere with the way the company is being run. Despite the pandemic and the world working from home, Box’s stock hasn’t risen as much as other SaaS firms.

Starboard says this is why Box is blowing it

In a letter to shareholders, Starboard, which owns more than 7% of the company, wrote, “Unfortunately, (Box’s) execution has fallen well short of expectations,with last year’s annual billings growth below 10% for the first time in the Company’s public history, continued negative GAAP earnings, and a share price that is still below where it closed after its first day of trading following its IPO more than six years ago.”

Starboard claims Box’s problems are self-inflicted

“We believe Box can and should be a vibrant company addressing unmet needs in a large and growing category of the enterprise software market with its cloud-native content management solution,” said Starboard. “We believe the issues at Box are largely company specific and self-inflicted. There is no good reason that Box should be unable to deliver improved growth and profitability, at least in-line with better performing software companies, which, in turn,would create significant shareholder value.”

Starboard wants to bring in new directors to Box’s board

“In accordance with the Box’s governance deadlines and in order to preserve our rights as stockholders, we (Starboard) intend to deliver to Box a formal notice nominating highly qualified director candidates for election at the 2021 Annual Meeting of Stockholders ahead of the upcoming deadline.”

Box’s management accused of a shameless and utterly transparent attempt to “buy the vote”

Starboard further wrote that “The second financing was transparently done to insulate management and the Board ahead of a potential…