On August 2, activist investor Carl Icahn revealed he held a 12.6% stake in data analytics company Cloudera (CLDR). He raised that to 18.4% on August 9. Cloudera stock rose about 4% on August 2 following the news of Icahn’s stake. As of Friday, it had risen 10.2% since the announcement. According to Icahn Enterprises’ (IEP) SEC filing, Icahn believes the company’s stock is undervalued. He would like to increase shareholder value and potentially seek board representation. Cloudera stock has fallen 36.7% year-to-date, mainly due to the company downgrading its 2019 guidance. Cloudera’s poor handling of its merger with Hortonworks ultimately led to its guidance downgrade.
Icahn’s push for changes
Icahn is known for turning around companies by first building a large stake in them and then asking for changes to management, business strategy, or capital allocation. Icahn was pushing for changes—or even a sale—at Caesars Entertainment (CZR) for a long time. In June, Eldorado Resorts (ERI) agreed to merge with Caesars.
However, one of his recent activism stints has not gone the way he wanted. Although he called out Anadarko Petroleum’s (APC) acquisition by Occidental Petroleum (OXY) for being very expensive, the acquisition was completed on August 8. He is now fighting for four seats on Occidental’s board to prevent it from carrying out expensive acquisitions in the future. He’s also trying to provide shareholders with a say in such matters.
Cloudera gives two board seats to Icahn in settlement
Today, Reuters reported Cloudera has agreed to give two board seats to Icahn. In exchange, Icahn has agreed to limit his ownership of the stock to 20% and not nominate any directors for the 2020 annual meeting. Nicholas Graziano’s and Jesse Lynn’s addition brings Cloudera’s board member count to ten. CLDR stock rose by about 2% in premarket trading on this news. However, it had fallen by 1.9% as of 9:45 am ET today due to simmering trade tensions affecting broader markets.