Activist Investor Urges GoDaddy to Enhance Shareholder Value
Activist investor Starboard Value is advocating for GoDaddy to take action to increase shareholder value and improve its financial performance. In a letter addressed to the web-services provider, Starboard expressed disappointment with GoDaddy's operational and stock price performance over the past year and a half. It believes that the company's stock is currently undervalued, trading at a significant discount compared to its peers.
With a 7.8% stake in GoDaddy, Starboard is the third-largest shareholder, and it sees potential for the company to enhance its operating and financial performance by implementing cost-cutting measures. The investor suggests that even with moderate revenue growth, management has an opportunity to achieve margin expansion. Starboard emphasizes the importance of ongoing cost reductions, regardless of progress in generating revenue.
Moreover, Starboard proposes that if GoDaddy fails to meet its objectives, it should consider exploring alternative strategies for creating value, including the possibility of a sale. However, the activist investor expressed concern over GoDaddy's repeated rejection of its requests for a direct role on the board, particularly as the company has struggled to meet its commitments and generate satisfactory returns for shareholders.
GoDaddy has not yet responded to Starboard's letter.
All Rights Reserved © 2024
Post a comment