SAP shares spike after Elliott reveals $1.3 billion stake

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Activist investor Elliott revealed a $1.3 billion stake in SAP on Wednesday and said it supported a new management efficiency drive, sending shares in the German business software company to a record high.

SAP has until now escaped the attention of activist investors, as it's been steered by co-founder and Chairman Hasso Plattner, who has withstood tough competition from U.S. rivals and is still the biggest shareholder in the German company with 6.5 percent.

"This is that magic moment that people have been waiting for where they are like, wow, nobody grows like SAP, but can I get some margin out of this growth?" Bill McDermott, the 57-year-old New Yorker who has run SAP for nine years, told Reuters.

SAP's shares have underperformed rivals Oracle, Salesforce and Microsoft in the past 12 months. It trades at a forward price/earnings ratio of 21, compared to 58 at Salesforce, an all-cloud outfit, 25 at Microsoft and 15 at Oracle, according to Refinitiv data. The pivot by McDermott came as SAP reported a quarterly operating loss of 136 million euros due to an 886 million euro up-front charge arising from the announcement in January that SAP would let go of 4,400 people.

 

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