Technology
How Citrix Could Be Worth 50% More
June 11, 2015 1:35 pm
Last Updated: June 11, 2015 1:38 pm
Citrix Systems Inc. (NASDAQ: CTXS) is under pressure from activist investors. Elliot Management is petitioning the Citrix board of directors to make some changes within the company. The endgame in all this is to have a strong return for shareholders in the near future.Source: Thinkstock
Elliot Management, in typical activist fashion, sent a letter to the board of directors at Citrix. Ultimately the firm believes that Citrix can achieve a stock price of $90 to $100 or more per share by the end of 2016.
Note that the firm controls a stake of roughly 7% of Citrix, making it one of the largest shareholders. It controls 5.88 million shares of common stock and a series of options.
Elliot explained further:
This outcome — which represents an increase in stockholder value of approximately 50% — is achievable because Citrix has leading technology franchises in attractive markets but has struggled operationally for years. As a result, today Citrix’s operations and product portfolio represent an opportunity for improvement of uniquely significant magnitude.
The activist firm gave the purpose of the letter in a few parts:
ALSO READ: Deutsche Bank Picks Top 3 Cybersecurity Stocks to Buy Now
The firm also said:
To be clear, we approach this opportunity with tremendous respect for the work Mark and the entire Citrix team have done to achieve technological leadership, particularly in the high-quality markets in which Citrix participates. Without their vision, the enormous opportunity outlined below would not exist today.
The range of $90 to $100 is up 36% to 51% from the $65.97 close. After a gain of almost 7% on Thursday, that still leaves way above average expected gains versus the market if Elliott’s plan manages to work out.
Shares of Citrix were up 7% at $70.68 Thursday afternoon. The stock has a consensus analyst price target of $68.23 and a 52-week trading range of $56.47 to $72.89.
Sponsored: Find a Qualified Financial Advisor:
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.