'Undervalued' GoDaddy asked to improve financials or explore sale by investor
By MYBRANDBOOK
Investor Starboard Value said that GoDaddy was "deeply" undervalued and that the web services firm should consider a potential sale if it cannot improve its financial performance. The web domain registration player has been grappling with a revenue slowdown after the pandemic as sticky inflation and rising interest rates hit tech spending.
Starboard bought into GoDaddy in 2021 and is its third-largest shareholder with a 7.8% stake. The investor said the firm was set to miss almost every target set for the next two years at its 2022 investor day, including those for revenue and adjusted core profit growth. It urged GoDaddy "to be objective in assessing the prospects for significant revenue growth," while suggesting that it should improve margins by cutting down expenses.
Starboard also highlighted the company's technology and development costs, which have outpaced revenue growth over the last five years and totaled nearly $800 million last year.
"Since late 2021, the GoDaddy management team and several directors have engaged in regular and constructive discussions with Starboard Value LP. We value their perspective and look forward to continuing the dialogue," the company said in a statement.
Starboard also disclosed that the company has denied its requests for a board seat over the past 18 months.
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