We were all geared up to do a story on the Windows 10 launch and all the parties that Microsoft was going to have in their stores yesterday. Then we read this little tidbit on Citrix’s news site that Mark Templeton is retiring (again) and that the company is cooperating with Elliott. Apparently this is all good news, as Citrix’s stock jumped 8% instantly.
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So what’s going on?
Mark is retiring
Back in February 2014, Citrix announced that CEO Mark Templeton would be retiring. We wrote about it here and discussed possible replacements. Three months later, Citrix announced that no, actually, on second thought, Mark will not retire. Then yesterday we got a press release from Citrix announcing their CEO succession plan.
Last year when Mark first un-retired, Citrix chairman Thomas Bogan said, "Mark has made a multi-year commitment.” However since that statement was not multiple years ago, we can assume his retirement was not planned.
Mark himself also indicated the he planned to stay longer saying, "While I had planned to retire within the year following my leave of absence, my personal circumstances have changed, and I am more determined than ever to lead Citrix through its next wave of transformation."
Citrix is cooperating with Elliott
Of course the real reason Mark is out is due to Elliott’s letter and them taking action.
Six weeks ago, a company called Elliott & Associates, owner of about 7.5% of Citrix’s stock, sent an open letter to Citrix which accused them of having lost focus and suggesting they need to cut or spin off a bunch of non-core businesses. With proper focus and management, Elliott believed Citrix’s stock could get to $100 per share by the end of next year.
So far it looks like they’re right, as Citrix’s stock was $66 before the letter was published; it immediately jumped to $70 when Elliott released their letter; and yesterday it jumped to $75 when Citrix announced they’d work with them.
The gist of the deal is that Elliott gets a board seat, and Elliott and Citrix will mutually agree on another new board member. Two existing board members are leaving to make room for the two new people.
Elliott and Citrix also signed something called a “standstill agreement” which basically says that Elliott agrees not to bring any shareholder votes, proxy fights, etc. for one year, as long as the Elliott guy is still on the board.
Thomas Bogan (same Citrix board member who was quoted in all those other press releases) said, "We believe the addition of new and fresh perspectives to our board will ensure Citrix continues to lead in application networking and virtualization markets,"
Notice there’s nothing about GoTo, NetScaler, mobile, or any of the other “distraction” areas that Elliott called Citrix out on.
Overall this is an interesting time for the company. It’s fun to be a watcher!
Windows 10 launch day
By the way, here’s the Microsoft Store at the Westfield Mall in downtown San Francisco yesterday during the Windows 10 global launch. Apparently we beat the rush.