Newsletters
Customer Relationship Management News NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home CRM Systems Customer Service Contact Centers Business Intelligence More Topics...
GET RECOGNIZED.
Let an ISACA® certification
elevate your career.

Register today and save
Data Centers
DDoS Protection Powered By Verisign
Average Rating:
Rate this article:  
Juniper Networks Under Investor Pressure To Change Course

Juniper Networks Under Investor Pressure To Change Course
By Barry Levine

Share
Share on Facebook Share on Twitter Share on Linkedin Share on Google Plus

The proposals for Juniper Networks by Elliott Management would cut costs by $200 million a year, in part by reducing spending so that it would be more aligned with what the investment fund said were industry norms. These include trimming R&D, lowering engineers' compensation and re-examining investment in security and switching, where profits are lower.
 


Juniper Networks could be making changes in -- or even sell -- its security and switching units, if it agrees to changes being demanded by a key investor. Hedge fund Elliott Management Corp. is asking Juniper, the industry's second-largest maker of computing networking equipment after Cisco, to make the changes in order to boost its share price and "unlock significant value."

The requests for a change of direction at Juniper were made in a 27-page presentation issued by Elliott on Monday, which pointed to new directions involving cost realignment, capital return and product portfolio optimization. The presentation, also filed with regulators, described Juniper's performance as lacking compared with other tech competitors, and said that its shareholders "are significantly frustrated."

The proposals would cut costs by $200 million a year, in part by reducing spending so that it would be more aligned with what the investment fund said are industry norms. These include trimming R&D investment, and lowering engineers' compensation to levels that Elliott contended is more in line with packages paid by Juniper's competitors.

More than $3 Billion in Cash

Elliott, which owns 6.2 percent of Juniper's common stock, said Juniper's stock is undervalued, and could be worth as much as $40 a share. On Monday afternoon, Juniper shares sold for $25.53, an 8 percent increase over Friday's prices.

The fund is also calling on Juniper to buy back as much as $3.5 billion of its shares and to pay a dividend, which the company has never done in its nearly two decades of existence.

Elliott pointed out that Juniper has more than $3 billion in cash, and said Juniper is keeping more cash on hand as a percentage of its market capitalization than even the cash-hoarding Apple. The fund is also asking Juniper to re-examine its activities in security and switching, including the possibility of selling those businesses. The third-quarter report in the fall found that revenue growth was dropping for Juniper in switches and revenue totals were falling in security software.

New CEO

A new CEO, ex-Barclays executive Shaygan Kheradpir, joined Juniper at the beginning of the year. Spending for research and development, which Ellliott is seeking to trim, was a key emphasis of Kheradpir's predecessor as CEO, former Microsoft executive Kevin Johnson. Additionally, there are some board nominations coming up later this month, and those positions, when filled, could also tilt the direction of the company.

For its part, Juniper has issued a statement that it "welcomes the opinions and insights of its shareholders," adding that it is "open to constructive input towards the goal of enhancing shareholder value."

Last week, Elliott Management made an offer to buy computer network company Riverbed Technology, in which Elliott already had a small stake. Shortly after Elliott's proposal, the Riverbed board approved a plan that would prevent any single investor from buying more than 10 percent of the company. In 2013, Elliott was part of a group that acquired BMC Software for nearly $7 billion.
 

Tell Us What You Think
Comment:

Name:



Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.


 Data Centers
1.   Support for Facebook in NYC Dispute
2.   Facebook Buys Cybersecurity Firm
3.   Dynamics CRM Online Extends Reach
4.   Oracle Releases a Slew of Upgrades
5.   AMD Debuts 64-Bit ARM Server Chips


advertisement
Dynamics CRM Online Extends Reach
Now available in 17 more countries.
Average Rating:
AMD Debuts 64-Bit ARM Server Chips
New Opterons target data center needs.
Average Rating:
Support for Facebook in NYC Dispute
Search warrants loom for user data.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Cost of Target Data Breach: $148 Million Plus Loss of Trust
The now infamous Target data breach is still costing the company -- and its shareholders -- plenty. In fact, the retailing giant forecast the December 2013 incident cost shareholders $148 million.
 
Aruba Networks Handles Black Hat with Aplomb
It's not an easy job. Aruba Networks' task throughout the Black Hat USA conference in Las Vegas this month was to ensure thousands of attendees could connect without malicious attacks.
 
Chinese Hackers Nab Info on Millions of U.S. Patients
A group of Chinese hackers has stolen the personal information, including names and Social Security numbers, of about 4.5 million patients at hospitals operated by Community Health Systems.
 

Enterprise Hardware Spotlight
Three New Lenovo PCs Aimed at Business Users
Businesses everywhere want computing solutions that do more for less money, and Lenovo has unveiled three new desktop PCs that offer solid computing at a budget-minded price.
 
Aruba Networks Handles Black Hat with Aplomb
It's not an easy job. Aruba Networks' task throughout the Black Hat USA conference in Las Vegas this month was to ensure thousands of attendees could connect without malicious attacks.
 
Compression, Deduplication Come to Violin Concerto 2200
Violin Memory has announced that data deduplication and compression capabilities are now available on its Concerto 2200 solution. Typically, users will experience deduplication rates between 6:1 and 10:1.
 

Mobile Technology Spotlight
Apple Stock Soars Ahead of iPhone 6 Launch
The imminent release of the iPhone 6 -- and maybe even an iWatch -- has sent Apple's stock soaring to new heights. Considering what else the firm could have up its sleeve -- the stratosphere may be the limit.
 
HTC Debuts Windows Phone Version of One M8 Smartphone
HTC is bringing the Windows Phone mobile OS to its flagship One M8 device -- the first time any mainstream flagship smartphone has been offered with a choice of operating systems.
 
Verizon Earns Top Rating in Mobile Network Comparison
A new report says Verizon Wireless was the top-performing U.S. cellphone service provider in the first half of 2014, on a nationwide and state-by-state basis, as well as in metro areas.
 

Navigation
CRM Daily
Home/Top News | CRM Systems | Customer Service | Contact Centers | Business Intelligence | Sales & Marketing | Customer Data | CRM Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.