Monitoring & Assurance

Gigamon Becomes Hedge Fund Elliott's Latest Target

Executives might not be overjoyed when Elliott Management gets involved with their company. But investors -- that's another matter.

Shares of Gigamon Systems LLC rose 18% today to $41.20 after Elliott announced, via an SEC 13-D filing, that it's amassed 15.3% of Gigamon's available shares.

Hedge funds file 13-Ds all the time. But Elliott is an activist fund, one that takes a stake in a company and then begins demanding management changes, acquisitions or selloffs, all in the name of bettering shareholders' returns. In recent years, Elliott has turned its eye toward the tech sector, sparking changes at companies including Juniper Networks Inc. (NYSE: JNPR), Mitel Networks Corp. and Riverbed Technology Inc. (Nasdaq: RVBD). (See M&A Speculation Swirls Around Juniper, Mitel to Buy Polycom for $1.96B and Thoma, Teachers Fund Win Riverbed's Hand.)

So, life is probably going to get interesting quickly for Gigamon executives, although there's no indication yet as to what changes Elliott will suggest. In the SEC filing, Elliott simply notes that Gigamon shares are "undervalued." Gigamon traded in the $60-per-share range back in November.

Gigamon first came to Light Reading's attention way back in 2005 because some of its founders had optical-networking roots. (See Valley Wonk: The Indie Startup -- and dig that retro movie reference in the lead.)

But the company's focus is network monitoring, a sector that has blossomed with the rise of network analytics. That's made network monitoring a catalyst for automation and a key component in security. (See CEO Chat With Gigamon's Paul Hooper.)

— Craig Matsumoto, Editor-in-Chief, Light Reading

James_B_Crawshaw 5/9/2017 | 5:44:19 AM
M&A visibility So who's going to end up buying Gigamon?

A test & measurement vendor like Netscout, Viavi or Keysight?

Or a switch vendor like Cisco?

I know who has more money to spend ...
Sign In