Hewlett Packard Enterprise (HPE, Financial) has announced a partnership with activist investor Elliott Investment Management to enhance shareholder value. This collaboration includes the formation of a strategic committee aimed at addressing competition in the AI data center market. Former Citrix CEO and current KLA chairman, Robert Calderoni, will chair this committee, joined by three independent directors. They aim to strategize on operations and capital allocation.
Elliott's partner, Jason Genrich, expressed optimism about HPE's vast potential value, emphasizing Calderoni's role in uncovering growth opportunities. Despite strong AI server demand, HPE faces challenges from competitors like Dell (DELL) and the pressure of high chip costs, involving products from NVIDIA (NVDA) and AMD (SMCI). Additionally, HPE is dealing with recent U.S. tariffs and plans to cut about 3,000 jobs.
In June, HPE completed a $13 billion acquisition of Juniper Networks, necessitating the divestment of specific wireless and network businesses under antitrust conditions. The agreement with Elliott includes governance clauses for information sharing and board appointments, with Elliott holding a significant stake of over $1.5 billion in HPE.
HPE's stock, trading at $20.27, has dipped 0.05% and remains down 5% year-to-date, underperforming its peers and the S&P 500.
