Riverbed Technology Inc. shares rose the most in more than a year after activist fund manager Elliott Associates LP said it acquired a 10.4 percent stake and will push for strategic changes at the computer-networking company.
Elliott believes Riverbed is “significantly undervalued,” considering its technology speeds thousands of networks and plays a vital role for clients, the activist investor said today in a regulatory filing. Riverbed, based in San Francisco, can boost its valuation by reviewing its strategy and capital structure, Elliott said.
“We have detailed these observations to the board of directors of the issuer and look forward to a constructive dialogue,” Elliott said in the filing.
Elliott, based in New York, has pressured technology providers including NetApp Inc., BMC Software Inc. and Compuware Corp. to boost shareholder value after taking stakes in the companies. Activist funds generally buy shares in companies and try to force corporate management and directors to make changes that boost investor returns.
“Riverbed is focused on creating value for all of our shareholders and maintains an open dialogue with our shareholders, including Elliott,” it said in a statement today.
The company’s recent third-quarter results, with 21 percent year-over-year revenue growth and higher sequential operating margins, show its commitment to “strong execution and solid expense management in a mixed economic and weak federal spending environment,” Riverbed said.
Riverbed climbed 16 percent to $17.54, the biggest one-day jump since July 2012. Before today, the stock had fallen 23 percent this year.
Riverbed competes with companies such as F5 Networks Inc., providing technology that helps organizations manage data networks. Another rival, Blue Coat Systems Inc., was acquired by private equity firm Thoma Bravo LLC for about $1.3 billion last year. Blue Coat acquired competitor Packeteer Inc. in 2008.