Starboard Value Seeks to Make Cloud Company Box Profitable
Posted on 03/23/2020
On March 22, 2020, activist investor Starboard Value LP inked a deal with Redwood City-based Box, Inc., in which it acquired a 7.5% stake last fall, whereby it will get three directors on Box’s board of directors. Box’s board of directors is being increase from nine directors to twelve directors. Starboard Value now owns approximately 7.7% of Box’s outstanding common stock.
According to the press release, “Jack Lazar, formerly chief financial officer of GoPro and Atheros Communications, will join the Box Board of Directors immediately. In addition, a second new director will be selected from a list of candidates provided by Starboard or will otherwise be mutually agreed. A third new director will be selected by the board prior to the 2020 Annual Meeting.”
Box is a cloud content management company, but started out as a consumer storage company. Box has incurred significant losses in each period since its inception in 2005. Box incurred net losses of US$ 144.3 million, US$ 134.6 million, and US$ 155.0 million in its fiscal years ended January 31, 2020, 2019 and 2018, respectively. As of January 31, 2020, Box had an accumulated deficit of US$ 1.3 billion. These losses and accumulated deficit reflect the substantial investments Box made to acquire new customers and develop its services.
