Hollywood loves activist shareholders - remember Wall Street and Gordon Gekko? The tech world has seen its fair share of them over the years, but there are two prominent cases I will highlight: one has influenced managements direction already, while the other wants to get rid of management.
Elliott Management has successfully changed course for Iron Mountain where they hold a 5% stake. Rather than continue with subpar margins in their ill-gotten Digital Division, Iron Mountain divested that division to Autonomy for $380m just a few days ago. This brings them one step closer to their end goal of becoming a REIT, where Elliott Mgmt will be able to collect handsome dividends on their investment.
Microsofts Steve Ballmer has been called to the chopping block by David Einhorn who manages Greenlight Capital, a hedge fund that believes MSFT still has a lot of value only to be unlocked with a new CEO at its helm. I have a lot of friends and family that work in Redmond so Ill try not to be blunt, but there are a lot of new and exciting things happening with Kinect, the Skype acquisition, and the newly announced Windows 8, but Ballmer is raining on the parade and keeping stock returns depressed in many peoples' opinion.
Money and returns are the primary motivator for activist shareholders. Given that we live in a capitalist society, dollars are the reward for doing something exceptionally well. For Elliott its milking a cash cow with steady returns, but for Greenlight its fully capturing the potential that this software leader once was.