Shares of GoDaddy Inc.
GDDY,
gained 3.5% in premarket trading Tuesday, after activist investor Starboard Value LP said it sent a letter to the company urging it to consider “alternative value creation opportunities,” including a potential sales of the web-hosting company. Starboard, which owns a 7.8% stake in GoDaddy, said GoDaddy is “deeply undervalued,” as the stock trades at an almost 40% discount to the broader set of technology peers. Starboard said it strongly believes the company should cut costs further, and said it was “deeply disturbing” that it hasn’t welcomed one of its largest shareholders to be represented on its board at a time when the company has repeatedly missed its commitments and generated poor shareholder returns. The stock has lost 6.0% over the past 12 months through Monday, while the Technology Select Sector SPDR ETF
XLK,
has rallied 24.6% and the S&P 500
SPX,
has advanced 9.2%.
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