Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Please click for more information, or scroll down to pass the ad, or Close Ad.
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Hardware
24/7/365 Network Uptime
Average Rating:
Rate this article:  
Juniper Networks Under Investor Pressure To Change Course
Juniper Networks Under Investor Pressure To Change Course

By Barry Levine
January 13, 2014 2:12PM

    Bookmark and Share
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:



Neustar, Inc. (NYSE: NSR) is a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors. Neustar applies its advanced, secure technologies in location, identification, and evaluation to help its customers promote and protect their businesses. More information is available at www.neustar.biz.


 Hardware
1.   Profit and Revenue Slip for IBM
2.   Online Access for the Deaf and Blind
3.   Vaio Fit Battery Danger Forces Recall
4.   Drop in Global PC Shipments Slows
5.   Fast Seagate 6 TB Drive for Data Center


advertisement
Online Access for the Deaf and Blind
Pilot program provides technology tools.
Average Rating:
Fast Seagate 6 TB Drive for Data Center
Can use 12 Gb/s SAS interface.
Average Rating:
Sony Digital Paper Cuts Paper Waste
High price justifiable for business.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Heartbleed Could Cost Millions, Could Have Been Prevented
Early estimates of Heartbleed’s cost to enterprises are running in the millions. The reason: revoking all the SSL certificates the bug exposed will come at a very hefty price. Some say it all could have been avoided.
 
Michaels Says Nearly 3M Credit, Debit Cards Breached
Arts and crafts retail giant Michaels Stores has confirmed that a data breach at its POS terminals from May 2013 to Jan. 2014 may have exposed nearly 3 million customer credit and debit cards.
 
Google's Street View Software Unravels CAPTCHAs
The latest software Google uses for its Street View cars to read street numbers in images for Google Maps works so well that it also solves CAPTCHAs, those puzzles designed to defeat bots.
 

Enterprise Hardware Spotlight
Vaio Fit 11A Battery Danger Forces Recall by Sony
Using a Sony Vaio Fit 11A laptop? It's time to send it back to Sony. In fact, Sony is encouraging people to stop using the laptop after several reports of its Panasonic battery overheating.
 
Continued Drop in Global PC Shipments Slows
Worldwide shipments of PCs fell during the first three months of the year, but the global slump in PC demand may be easing, with a considerable slowdown from last year's drops.
 
Google Glass Finds a Home in Medical Education, Practice
The innovative headpiece may find its niche in markets where hands-free access to data can be a big advantage. Glass experiments for doctors are already under way, with some promising results.
 

Mobile Technology Spotlight
Review: Siri-Like Cortana Fills Windows Phone Gap
With the new Cortana virtual assistant, Windows catches up with Apple's iOS and Google's Android in a major way, taking some of the best parts of Apple's and Google's virtual assistants, with new tools too.
 
With Galaxy S5, Samsung Proves Less Can Be More
Samsung has produced the most formidable rival yet to the iPhone 5s: the Galaxy S5. The device is the fifth edition of the company's successful line of Galaxy S smartphones, and shows less can be more.
 
Facebook Rolls Out Potentially Intrusive Location-Sharing
Looking for friends? Facebook users in the U.S. will soon be able to see which of their friends are nearby, using a smartphone's GPS. Could be a cool feature in some cases, or way too much information.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | Small Business | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
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 | XML/RSS Feed

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.