Activist investor Starboard sets sights on cloud content company Box
10 May 2021
Activist investor Starboard Value has a message for Box, the cloud content management company in which it's the largest outside shareholder: We're still coming for you.
Why it matters: Prolonged activist campaigns against Silicon Valley companies are still relatively unusual.
Driving the news: Starboard on Monday sent Box a letter in which it nominated three directors, including one to replace Box CEO Aaron Levie, and said it opposes a $500 million investment from KKR.
History: Starboard first disclosed its Box position in late 2019, and last spring negotiated with the company to add a pair of independent directors (Bethany Mayer and Jack Lazar).
- Starboard decided early this year that the two new reps weren't driving enough change at Box, or at least didn't help the company capitalize enough from the work-from-home pandemic.
- By February it was making noise about nominating new directors, to which Box responded by inking the KKR deal (which both Mayer and Lazar voted to support), most of which is to be used for stock buybacks.
We referred to KKR's investment as "protection money," and suggested that Starboard could take the opportunity to cash out. But the deal hasn't yet closed, and Starboard is making a stand before considering an exit.
Starboard's primary gripe seems to be about Box's share price, which is lower today than when it first disclosed its position (although shares are up for both the last 12 months and year-to-date).
- It's not clear if Starboard wants to boot Levie from the board, or would seek to expand the board to accommodate him.
Box argues that Starboard is mischaracterizing the company's performance, particularly around operating margin. Or, as one source close to Box put it to me: "They're using messages from the middle of last year, and ignoring what was disclosed for the quarters after that."
- Box also believes that its two directors up for reelection, in addition to Levy, are superior to Starboard's proposed slate, because they are the CEO of McAfee and the lead independent director at ProofPoint (which just agreed to the largest-ever buyout of a software company).
The bottom line: This is the type of situation that tech founders used to cite as compelling reasons not to IPO. If it gets nastier, and plays out in public, it could prompt some to reconsider their public plans.
Transcripts show George Floyd told police "I can't breathe" over 20 times
Section2Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.
Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.
The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.
- The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.
What the transcripts say:
- Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
- The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
- Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."
Read the transcripts via DocumentCloud.