Box (NYSE:BOX) stock is on the rise Tuesday following rumors that the company is about to get caught up in a Board battle.
According to recent reports, Starboard Value is looking to change the company’s Board of Directors. The reason behind this is the lack of push from the cloud company to properly take advantage of the novel coronavirus pandemic.
During the pandemic, many cloud companies saw boosts as more people worked from home. Box isn’t among them. Its stock has barely risen when compared to gains seen by other cloud companies on the S&P 500.
Sources claim that Starboard Value wants Box to improve its business if it doesn’t want a battle over three Board seats up for election this year. This wouldn’t be the first time that the hedge fund has pushed for changes to the Board of Directors. It did the same in 2020 and this resulted in three Board members being switched out for independent directors.
A Box spokesperson said the following when asked by Reuters about the rumors bumping its stock up today.
“Box is committed to maintaining an active and engaged dialogue with all of our stockholders, including Starboard. Last year we worked constructively with Starboard on an agreement, including adding three new independent board members, and today the board of directors and management team remains focused on driving long-term stockholder value.”
Starboard Value initially took out a stake in BOX stock back in 2019. That saw it acquire a 7% stake in the company with 11 million shares. The hedge fund is a known activist investor that pushes for changes to increase shareholder value.
BOX stock was up 6.5% as of Tuesday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.