Box stock surges 10% after report says the company is exploring a sale amid pressure from activist investor Starboard

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Box stock surges 10% after report says the company is exploring a sale amid pressure from activist investor Starboard
Aaron Levie, the CEO of Box.Steve Jennings/Getty Images
  • Box stock surged as much as 10% on Monday before paring gains.
  • A report from Reuters Monday said the cloud storage company may be open to a sale amid pressure from activist investor Starboard Value LP.
  • Starboard has been edging Box to sell after pushing for a board challenge less than a month ago.

Shares of Box surged as much as 10% on Monday after reports from Reuters and CNBC said the company is exploring a sale amid pressure from hedge fund and activist investor Starboard Value LP.

The news comes after Reuters reported last month that Starboard was preparing to launch a board challenge against Box unless major changes were made at the cloud storage company.

Reports say Starboard has been upset with Box's inability to capitalize on the work-from-home trend during the pandemic. Starboard currently owns 10.9 million shares of Box, worth some $246 million as of March 19's closing price.

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Despite the pressure from Starboard, Box stock is up roughly 100% over the past year. However, even after Monday's move higher, the Redwood City, California-based firm is down 13% from its May, 2018 record highs.

In Box's fiscal year 2021 earnings report filed last Friday the company revealed revenues of $770 million versus $696 million a year ago.

Although the company was able to limit losses to just $43 million versus $144 million in fiscal year 2020, Box's slowing revenue growth during the pandemic has been a cause for concern for investors.

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In January, DA Davidson analyst Rishi Jaluria downgraded Box to "neutral" and issued an $18 price target on the company citing low scores in a CIO survey for 2021 spending intentions.

Box traded down 6.63% as of 1:14 p.m. ET on Monday.

Box stock surges 10% after report says the company is exploring a sale amid pressure from activist investor Starboard
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