With share prices hitting new lows in recent months, activist investors such as Paul Singer’s Elliott Management are flooding into the enterprise software industry, taking stakes in companies ranging from Citrix Systems to Qlik. They’re hoping to cash in on—and possibly even spark—what could be a wave of consolidation led by cash-rich big tech companies like Oracle, SAP, Microsoft and IBM.
A merger wave won’t necessarily happen—talk of a recession could dissuade big companies from spending money on deals. At the very least, though, these activists appear likely to force companies to cut costs and boost profits. Some executives may be forced out. It’s a reminder for private tech firms of one of the hazards of going public.