Some commentary on the following article: https://techcrunch.com/2022/03/18/zendesks-latest-problem-is-an-activist-investor/
The cornerstone of this special vote questions Zendesk’s board decision on the proposed Momentive acquisition. While I also believe Zendesk’s selection of the company and at those valuations was not ideal, the direction towards broader CX continues to be a sound strategy.
The proxy suggests a replacement of board members. The recommended members, a wedge cohort friendly to the PE firm, will likely want to navigate Zendesk towards a similar movement as it had once recommended.
Unfortunately, a few problems arise with this proxy and it’s timing:
1. Zendesk’s dynamic sector and strategic direction requires deep, recent, and relevant industry sector experiences. While seasoned, the recommended board members do not appear support the ideal experience aligned to Zendesk plans for CX expansion.
2. With acquisition defeated, Zendesk still has access to resources to navigate towards a better CX platform strategy.
3. Shares of Zendesk are still well outperforming the Russell 1000 and Nasdaq. Performance difference only narrowing during the PE activist play.
4. Before this acquisition decision, the CEO/founder, Mikkel Svane, has a proven track record of navigating challenges and accompanied by growth mindset members of the board.
In these situations, the various motivations are playing out as expected. The past performance doesn’t seem to play in as viable factor here. So, shareholders will have to determine if future value in the company is growth through continued development and acquisitions or by a buyout or being acquired.
I also see from this entire situation all parties still need to be supported by deeper and more experienced customer success and CX industry sector insights and advice to better position for next steps.