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:
- To use as an introduction
- Preview some of the extensive work Elliot has done to validate the $90 to $100+ per share opportunity
- To request a meeting with the board of directors to share the firm’s thoughts about how to improve Citrix for the benefit of stockholders, employees and customers
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: Attention Savvy Investors: Speak to 3 Financial Experts – FREE
Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply
clicking here you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
