Box (BOX) Gains on Chatter as Starboard Positions to Gain Control of Board

March 22, 2021 10:38 AM EDT
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Price: $21.90 -0.45%

Rating Summary:
    14 Buy, 9 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 18 | Down: 10 | New: 17
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Box (NYSE: BOX) is trading higher for the second session following a disclosure pre-open Friday that it would extend the board nomination window from April 13 until May 11. The cloud storage company has been a target of activist investor Starboard, which is now in a position to take control of the board.

In February, Reuters reported that Starboard is preparing to launch a board challenge unless the company takes steps to boost value for shareholders. Starboard has been an investor in Box since 2019 and in March 2020 agreed not to launch a board challenge under an agreement to add three new independent directors.

Another three of Box's nine directors is up for election this year. Starboard is said to be exploring putting forth candidates for all three board seats.

Gordon Haskett analyst Don Bilson points out that if Starboard took all the seats, it would have effective control of the company.

Bilson said the company could announce a strategic review and push back the annual meeting to prevent Starboard from taking control. The analyst also speculates CEO Aaron Levie could look to a private equity firm for protection in the form of an investment versus an outright sale.

Shares of BOX are up 3% Monday after gaining 7% on Friday.

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