Paul Singer’s Elliot Associates LP and its wholly owned subsidiaries acquired nearly 9% stake in Riverbed Technology, Inc. (NASDAQ:RVBD) and called the company undervalued based on its latest 13D filing with the Securities and Exchange Commission (SEC).
Elliot Associates’ regulatory filings
The activist hedge fund’s regulatory filing showed that Elliot Associates LP owned 5,080,455 shares or 3.1% stake while Elliot International LP & Elliott International Capital Advisors Inc. (EICA) purchased 9,435,231 shares or 5.8% stake in Riverbed Technology, Inc. (NASDAQ:RVBD).
Value Partners Asia ex-Japan Equity Fund has delivered a 60.7% return since its inception three years ago. In comparison, the MSCI All Counties Asia (ex-Japan) index has returned just 34% over the same period. The fund, which targets what it calls the best-in-class companies in "growth-like" areas of the market, such as information technology and Read More
Elliot, Elliot International & EICA have a collective economic exposure to approximately 1.5% of the shares of the outstanding common stock of the company pursuant to derivative agreements. Collectively, the activist hedge fund has approximately 10.4% economic exposure and voting power on the shares of the outstanding common stock of the company.
According to the activist hedge fund, Riverbed Technology, Inc. (NASDAQ:RVBD) is “significantly undervalued” and informed the board of directors of the company regarding its conviction. The company manufactures network equipment associated with information technology (IT) performance across wide area networks (WANs).
Elliot noted that Riverbed Technology, Inc. (NASDAQ:RVBD) is in a mission-critical position in the networks markets with extremely loyal customers who deeply value its service and maintenance. The hedge fund believes that the company has a stable platform capable of producing significant profitability while generating revenue growth in core and logically adjacent markets.
The activist hedge fund believes that the company will be able to grow and immediately increase value for shareholders by implementing certain value-maximizing operational, capital structure and strategic review initiatives.
Observation on Riverbed’s business
Elliot submitted its detailed observation on the business of Riverbed Technology Inc (NASDAQ:RVBD) to its board. The activist hedge is looking forward to a constructive discussion with the board of the company.
Currently, Elliot and its affiliates are the largest shareholder of the network equipment maker. Vanguard Group Inc owns 5.4% stake in Riverbed Technology, Inc. (NASDAQ:RVBD) as of September 30 based on data from FactSet Research.
The stock price of Riverbed Technology, Inc. (NASDAQ:RVBD) gained more than 16% to $17.59 per share around 1:00 in the afternoon in New York. The increase was driven by Elliot’s disclosure of acquiring a huge stake in the company.