Activist Investor Elliot Management Buys Stake In F5 Networks: WSJ

Elliott Management Corp. has acquired a stake in the Seattle-headquartered technology company F5 Networks Inc FFIV, according to the Wall Street Journal.

What Happened: The activist investor's purchase amounts to less than a 5% beneficial ownership and it doesn't require regulatory disclosure requirement, people familiar with the matter told the Journal.

Elliot Management is looking into the efficacy of F5’s acquisition of Shape Security Inc and Nginx Inc, the Journal noted.

F5 acquired cybersecurity company Shape Security Inc for approximately $1 billion in January. It completed the acquisition of software company Nginx Inc in May 2019 for $670 million, a deal originally announced in March 2019, according to a filing with the U.S. Securities and Exchange Commission. 

Why Does It Matter: Over the last month, F5 stock has gained close to 13%, but on a year-to-date basis, the stock has witnessed a stunted growth of approximately 2.56%. In comparison, the NASDAQ-100 Tech Sector index has witnessed a 25% uptick since the beginning of the year.

Elliott Management is well known for its activist strategies — buying stakes in companies and attempt to revive stock prices through reorganizing and restructuring.

In November 2019, Elliott Management, an investor in Nielsen Holdings PLC NLSN, was keen on offloading the data analytics company’s Global connect business. Nielsen sold the Global Connect business to Advent International earlier this month.

Price Action: FFIV shares closed 2.5% higher at $144.37 on Friday.

Photo Courtesy of World Economic Forum via Flickr