Elliott Management Takes Aim at Hewlett Packard Enterprise with $1.5 Billion Stake

Hewlett Packard Enterprise CEO Antonio Neri faces pressure from activist investor Elliott Management, which has a history of forcing out CEOs. Elliott's $1.5 billion stake in HPE has gone unnoticed by both parties, but clues to their negotiations can be found in HPE's recent inventory pricing error, which tanked its stock, and underperforming share price compared to peers. Elliott likely wants to address the discount and improve HPE's execution and efficiency.

Hewlett Packard Enterprise (HPE) CEO Antonio Neri is under scrutiny from activist investor Elliott Management, which holds a $1.5 billion stake in the company. The activist investor group has a history of forcing out CEOs, and their investment in HPE has remained largely unaddressed by both parties. However, clues to their negotiations can be found in HPE's recent inventory pricing error and underperforming stock compared to peers.

The most significant sign of trouble occurred when HPE published its Q1 earnings in March, which tanked its stock by nearly 16% on the day. Antonio Neri admitted in a CNBC interview that the company had made a mistake in accounting for the cost of its inventory, which harmed the company's profitability. This error wiped more than $3 billion off HPE's market cap [1].

Elliott Management's investment is a long position, indicating a desire to improve the company rather than bet against it. JPMorgan analyst Samik Chatterjee noted that Elliott may be addressing the discount at which HPE's shares trade relative to peers and aiming to improve execution and efficiencies [1].

HPE's share price has underperformed compared to its peers and the broader market. Since 2018, HPE stock has risen by 48% to just above $21 per share, while the S&P 500 rose by 135% during the same period [1]. This underperformance has drawn attention to HPE's operational efficiency and strategic direction.

Elliott Management typically prefers to avoid proxy battles and instead seeks mutual agreements with companies. In a previous instance with Phillips 66, Elliott Management collaborated with the company to reach a mutually beneficial solution rather than escalate to a proxy vote [2]. It is likely that HPE and Elliott Management are currently in negotiations to address these issues.

HPE has maintained that it welcomes the input of all shareholders, including Elliott Management, and values constructive dialogue [1, 2]. However, neither company has provided specific details on their negotiations.

References:
[1] https://fortune.com/2025/07/06/hewlett-packard-enterprise-ceo-antonio-neri-elliott-management/
[2] https://investorempires.com/at-hewlett-packard-enterprise-ceo-antonio-neri-is-negotiating-with-an-activist-investor-with-a-history-of-forcing-out-chief-executives/