Mellanox CEO Rebuts Criticism by Activist Investor Starboard
Last week, Mellanox published its results for the first quarter of 2018, reporting $251 million in quarterly revenue, a 33% rise compared to the same quarter last year
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While saying the company has taken some steps to reduce spending and increase profits, Mr. Waldman said that to maintain a competitive edge Mellanox has to continue to make large investments.In 2016 it bought Israel-based chip company EZchip Technologies Ltd. for $810 million. In 2011, Mellanox acquired Israel-based data center switchboard maker Voltaire Ltd. for approximately $218 million. Past acquisitions, Mr. Waldman said, that the acquisitions have proved beneficial to the company’s business. “We are very comfortable with that we are doing for the company, and I believe that, eventually, Starboard will realize we are doing the right thing,” he said. “ Dealing with investors is not easy, and boards tend to be eager to replace management, Mr. Waldman added. “Whoever invests in a company has the right to replace the management but what pains me in this sort of activism is its short-sightedness,” he added. “Our board of directors is very critical, observant and demanding, but Mellanox has good management, and the worse mistake investors can make is replacing good management,” Mr. Waldman said. Such a move, he said, “could ruin a company.”