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Starboard Value, Elliott Associates Sell Shares of Emulex Corporation

Emulex Corporation (NYSE:ELX), a company engaged in providing network connectivity and management solutions, has been in the middle of some important moves coming from some of its investors. Two hedge funds, Starboard Value, and Elliott Associates  recently filed amended forms with the Securities and Exchange Commission, reporting decreasing slightly their positions in the company.


Jeffrey Smith‘s hedge fund, Starboard Value disclosed recently cutting its position to around 4.1 million shares. This is already the second decline that Starboard is applying towards its holding in Emulex. Last week, the fund reduced its stake to 5.34 million shares, from 7.25 million held earlier. The position held currently by Starboard amasses 4.4% of the company’s common stock, down from 5.8%. Jeff Smith’s fund also revealed a purchase agreement signed with Emulex, under the terms of which the fund agrees to sell 600,000 shares of the company back to Emulex for an aggregate price of $4.7 million.

In a separate filing, Paul Singer‘s fund Elliott Associates reported that it now holds around 7.5 million shares of Emulex, down from over 8.9 million held according to an earlier filing. At the same time, the fund switched the nature of the position and now it’s stake in the company is a passive one. In an earlier filing, Elliott disclosed an agreement with the company’s board, under the terms of which, the Emulex shareholders will elect a new Board at their next meeting. Also, the current Board will reduce its number to comprise at most 11 members.

Amid the moves by Starboard and Elliott, the stock of Emulex closed yesterday by almost 4% in red. The stock of Emulex lost over 7% over the past month.

Disclosure: none

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