Starboard's Mellanox stake falls below 9%

Eyal Waldman  photo: courtesy Mellanox Technologies

Activist investor Starboard Value LP sold part of its stake in the Israeli technology company at a handsome profit.

Starboard Value LP has sold part of its stake in Israel company Mellanox Technologies (Nasdaq: MLNX) and now holds less than 10% of the company. The investment fund sold Mellanox shares to the tune of $67.2 million one day this week, at an average price of $85.2, eight months after first investing in Mellanox at prices of $44-51 per share.

Starboard now holds 8.6% of Mellanox, a stake worth $388 million. Both in cash and on paper, the fund has made a handsome profit. Since it became known that it had taken a stake in Mellanox, the latter's share price has risen 66%. During this period, Mellanox released improved results and published encouraging guidance, which contributed to the rise in its share price.

Activist investor Starboard expressed dissatisfaction at Mellanox's operating profit margin, and demanded an overhaul of the board of directors and to appoint directors that would represent it. After a struggle that went on for months, the sides recently reached a compromise whereby three new directors would be appointed to replace three that would step down, with one more director due to leave in the coming months.

Mellanox, headed by founder Eyal Waldman, produces communications equipment for fast data transfer. It has a market cap of $4.5 billion. The company is due to release its second quarter financials next week.

Meanwhile, Mellanox has announced the appointment of Eric Johnson, currently the company’s VP Corporate Controller, as principal financial and accounting officer, effective immediately. Johnson (54) has more than three decades of professional financial experience, including over 10 years of public accounting experience at Ernst& Young LLP, and he has served as VP Corporate Controller at Mellanox since June 2016. Mellanox's board continues to search for a permanent CFO.

Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

5 Comments
View comments in rows
Update by email about comments talkback
POST
Comments
Eyal Waldman  photo: courtesy Mellanox Technologies
Eyal Waldman photo: courtesy Mellanox Technologies
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018