4 days ago
HPE CEO Antonio Neri comes 'under pressure' from investor with a history of forcing out chief executives
Image credit: LinkedIn
Hewlett-Packard Enterprise
(HPE) CEO
Antonio Neri
is reportedly "under pressure" from
activist investor
Elliott Management, which has a history of forcing out chief executives.
Elliott Management
's $1.5 billion stake in HPE, first publicly reported in April, marks a significant investment in the company. Since then, both companies have remained silent regarding any negotiations between them. According to an earlier report by the news agency Reuters, 14 chief executives have been removed from their positions after
Elliott
acquired a stake in their companies and initiated discussions with their boards.
HPE
recently saw its stock value decline after failing to identify an error in its inventory pricing. Despite Elliott's investment being known to be a long position and not a short bet against the company, clues regarding demands from HPE are reportedly evident.
What HPE said about its relationship with investor Elliott Management
In a brief statement to Fortune, HPE said:
'We value the constructive input of all of our shareholders,'
however, it didn't mention any specifics.
The indication of trouble came in March when HPE released its Q1 earnings, causing its stock to drop nearly 16% in a single day. In a CNBC interview, CEO Antonio Neri acknowledged that the company had miscalculated inventory costs, which negatively impacted profitability and wiped more than $3 billion off HPE's market cap.
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'Near the end of the quarter, we realised that the cost of our inventory was slightly higher than the cost that we had in the pricing. That's on us. That should never happen,'
Neri noted.
When news emerged that Elliott sought influence over HPE, JPMorgan analyst Samik Chatterjee suggested the firm likely aimed to address HPE's stock valuation gap and improve operational efficiency. He also highlighted HPE's lagging performance, noting it generated $494,000 in revenue per employee, significantly less than Dell's $885,000.
HPE shares recently rose after the DOJ dropped its probe into the Juniper Networks acquisition, but the stock is still up only 48% since 2018, well behind the S&P 500's 135% gain.
Despite being in the AI era, HPE's performance has lagged, raising concerns about its leadership, with CEO Antonio Neri in charge for seven-half years and the board serving for over a decade, the report notes.
While some see a leadership shakeup as overdue, Elliott may instead seek a board seat and push for strategic changes through collaboration rather than a shareholder proxy fight.
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