Elliott Management Corp., the activist shareholder pushing for Riverbed Technology Inc. to sell itself, reiterated that call today after the software company reported preliminary results missing its own forecast.
Riverbed said it anticipates second-quarter sales of as much as $265 million, compared with a prior prediction of as much as $280 million. The San Francisco-based networking-equipment maker reported adjusted earnings for the quarter ended June 30 at the low end of a previous forecast of 26 cents to 28 cents a share.
“Riverbed’s poor performance this quarter reveals its decision to stonewall prospective buyers to be a serious and costly mistake,” New York-based Elliott said in a statement. “This is a clear sign that dramatic change is needed at Riverbed: The board should immediately retain an advisor and announce a review of strategic alternatives, including a sale.”
Elliott, which owns about 10.6 percent of Riverbed, has been embroiled in a tug-of-war this year with Chief Executive Officer and Chairman Jerry Kennelly about selling his company. The hedge fund, which today reiterated its $21-a-share cash offer for the company, initially offered $19 a share to prod an auction that Kennelly, who also co-founded Riverbed, has refused.
“Second quarter sales were below our expectations, principally in North America as we experienced longer sales cycles on some of our larger and more complex deals,” Kennelly said today in a statement. “We have carefully reviewed our opportunities and prospects for the remainder of the year and continue to have confidence in our ability to grow the business and deliver targeted earnings performance.”
The shares, which had climbed 13 percent this year before today’s announcement, fell 8.6 percent to $18.60 at the close in New York.