By Svea Herbst-Bayliss and Arsheeya Bajwa
(Reuters) -Hedge fund Elliott Investment Management has built a stake of more than $1.5 billion in Hewlett Packard Enterprise (NYSE:HPE), a person familiar with the matter said on Tuesday.
Elliott, one of the world’s biggest activist investors, now ranks among the information technology company’s biggest investors and plans to engage with management, said the person who was not permitted to discuss the campaign publicly.
Details of what Elliott may be pushing HPE, which is valued at $20 billion, to do could not be immediately determined.
News of Elliott’s campaign, first reported by Bloomberg, pushed HPE shares up nearly 5% to $14.98. Year-to-date, however, shares are down 30%, roughly four times the S&P 500 index’s 8% decline.
Elliott has a long history in technology investments, having owned stakes in Dell Technologies (NYSE:DELL) and Salesforce (NYSE:CRM), and the firm has often sat on tech companies’ boards.
Hewlett Packard Enterprise and Elliott declined to comment.
The company, which makes servers used in data centers that churn large amounts of data for artificial intelligence tasks, is considered by analysts to be among the most at risk from tariffs rolled out by U.S. President Donald Trump. It has been facing margin pressures due to costly production.
HPE in March laid out a plan to cut about $350 million in costs by fiscal 2027, which included cutting the global workforce by 5%.
The company is in the process of acquiring Juniper Networks (NYSE:JNPR) in an all-cash deal but has been sued by the U.S. Justice Department, which is seeking to block the transaction, arguing the deal would eliminate competition between the companies, raise prices and reduce innovation.
HPE CEO Antonio Neri signaled last month that the deal will still happen.
Elliott, which manages $70 billion in assets, has been pushing ahead with campaigns in the United States and abroad this year despite volatile trading conditions that have prompted a number of other companies and their corporate agitators to find common ground and settle. It is pushing for four board seats at Phillips 66 (NYSE:PSX) in one of the industry’s most closely watched proxy fights. Elliott also owns a nearly 5% stake in BP (NYSE:BP) and built a stake in Sumitomo Realty & Development.
One hallmark of Elliott’s campaigns has been to work with boards to find new management at companies that have been underperforming. Since 2022, 14 CEOs have left their positions at companies in which Elliott owned a stake, a person familiar with the matter said.