Starboard Value Doubles Down on Salesforce Stock Amid Red Flags

Activist hedge fund Starboard Value has increased its stake in Salesforce by nearly 50% in Q2, holding 1.3 million shares. This comes at a strategic time as CRM stock has been battered this year due to slowing revenue growth, shaky AI strategies, and aggressive acquisition spending. Starboard's aggressive stake increase sends a message that Salesforce still needs to improve efficiency and profitability. Would it be wise to load up on CRM shares now?

Activist hedge fund Starboard Value has significantly bolstered its position in Salesforce by increasing its stake by nearly 50% in the second quarter. As of June 30, Starboard owned 1.3 million shares, compared to 849,679 shares at the end of the first quarter [2]. This move comes at a time when Salesforce's stock price has plummeted by nearly 30% over the past six months, due to slowing revenue growth, questionable AI strategies, and aggressive acquisition spending [1].

Starboard's aggressive stake increase indicates that the hedge fund believes Salesforce still has room for improvement in terms of efficiency and profitability. This stance is not new; three years ago, Starboard was one of the first investors to publicly push Salesforce to make changes. However, many of these investors, including Starboard, reduced their stakes or exited completely by mid-2023 after the company reported better results and implemented several changes [1].

The current stock purchase by Starboard could signal a return to the combative investor environment of 2022. However, Salesforce has shown resilience in the past, and its stock price increased by nearly 100% in 2023. While the company's Chief Executive at Starboard, Jeffrey Smith, has expressed that Salesforce could still become more efficient and profitable, the impact of this latest move remains to be seen [1].

For investors considering loading up on CRM shares now, the situation presents a mixed bag. On one hand, the significant drop in stock price provides an opportunity for potential gains if Salesforce can improve its performance. On the other hand, the increased stake by Starboard suggests that there may be ongoing pressure on the company to make changes, which could lead to further volatility.

Ultimately, the decision to invest in Salesforce at this time will depend on individual risk tolerance and investment goals. Investors should closely monitor Salesforce's progress and the potential impact of Starboard's increased stake on the company's future performance.

References:
[1] https://www.salesforceben.com/activist-investor-starboard-buys-50-more-salesforce-stock/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3U6149:0-activist-starboard-buys-more-salesforce-stock-after-first-demanding-change-in-2022/