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. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
APC Free White Paper
Optimize your network investment &
Enter to win a Samsung Galaxy Note

www.apc.com
Hardware
Next Generation Data Center Is Here!
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:



APC has an established a reputation for solid products that virtually pay for themselves upon installation. Who has time to spend worrying about system downtime? APC makes it easy for you to focus on business growth instead of business downtime with reliable data center systems and IT solutions. Learn more here.


 Hardware
1.   AMD Debuts 64-Bit ARM Server Chips
2.   MacBook Pros Get Update, Price Cut
3.   Watson's First Consumer-Facing Gig
4.   China To Call Qualcomm a Monopoly
5.   Design Central to Microsoft Future


advertisement
AMD Debuts 64-Bit ARM Server Chips
New Opterons target data center needs.
Average Rating:
Design Central to Microsoft Future
New ethos a break from functional past.
Average Rating:
Most Networks Not Ready for IoT
But most enterprises are prepared.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
New 'Backoff' Malware Slips Undetected into Retail Systems
'Malicious actors' are using a new variety of malware to access consumer payment data remotely through point-of-sale systems, according to a report from the Department of Homeland Security.
 
IBM Beefs Up Identity Intelligence Security Solutions
Big Blue is betting big on identity intelligence. IBM just acquired a private firm with security software to govern user access to apps and data across cloud and on-premise environments.
 
USB Security Flaw Lets Hackers Hijack PCs
Hackers can use the firmware that controls USB functions to take control of computers, say security experts. That means there may be a new class of attack for which there are no defenses.
 

Enterprise Hardware Spotlight
AMD's ARM-Based Opteron Out in $3K Dev Kit
It's dubbed "Seattle" and it's AMD's first 64-bit ARM-based Opteron processor. The low-power chip is being released as part of AMD’s Opteron A1100-series developer kit, and aimed at high-end data center needs.
 
Apple Updates MacBook Pros, Cuts Prices Up to $100
The popular MacBook Pro laptop line just got an update and a price cut of as much as $100. The MacBook Pro with Retina display now includes faster processors and double the memory.
 
Dell, BlackBerry Not Sweating Apple-IBM Alliance
IBM's recent move to partner with Apple to sell iPhones and iPads loaded with corporate applications has excited investors in both companies, but two rivals say they are unperturbed for now.
 

Mobile Technology Spotlight
BlackBerry Messenger Now Available on Windows Phone
BlackBerry's free Messenger chatting and voice app is out of beta and widely available for Windows Phone users, the company said. BBM offers secure messaging, Groups, Voice, Channels and more.
 
Virgin Mobile Offers Custom Smartphone Plans
As the wireless carrier wars continue heating up, Virgin Mobile just threw the customization coal onto the fire. The firm has debuted a no-annual-contract plan with rates based on individual use.
 
Collaboration Provider Asana Revamps Mobile App
Asana, a collaboration software provider started by a Facebook founder, is now out with a rebuilt native iOS mobile app. It replaces one that even the company admits was not up to par.
 

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 | CRM Systems | 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

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.