Really? Can’t we leave any of these high-tech vendors alone.
Does Citrix Systems Inc. really need to be sold?
So here are the facts.
Bloomberg and Reuters have reported that Citrix has hired Goldman Sachs to look for some willing candidates. The news also revealed that a leveraged buyout won’t bring in the huge win fall of cash.
Already the stock price has soared to about $85 per share from a starting point of $79. That’s a huge jump; all because of this speculation. So as you can see shareholders are winning here.
Citrix has done exceptionally well in the last decade. And, today the company is really relevant in the whole Workspace-as-a-Service area. The term workspaces are becoming increasingly important as people are working anywhere and at any time these days.
It’s also well known in the marketplace for GoToMeeting. Its Xen line of products such as XenApp, XenDesktop, XenServer and XenClient also resonates well with customers. The company has also hit milestones with virtualization, mobility, networking and file sharing.
Citrix, which began as a remote access product vendor for old Microsoft DOS operation system back in 1989, has turned itself into a multi-billion dollar, multi-national corporation. Its products are used by more than 300,000 customers and more than 100 million people around the world.
And, you know what? There is nothing wrong with that.
But, Citrix has gone to this dance before. Just two years ago they were looking for a buyer and decided to link up with private equity firm Elliott Management instead. As the story goes Elliott wanted Citrix leadership to reduce expenses. Why do you think they would ask that? It’s too keep more money for themselves.
Recently Citrix spun-off its GoTo line.
Could Citrix has kept GoTo? Maybe spent some money investing in product development? Probably. But this is the problem when your focus is on maintaining and enhancing shareholder value instead of servicing customers.
Citrix used the phrase “improving operational efficiency” for that spin-off decision. What do you think that means? If you look at the wording it means dramatically increasing your cashflow – right now.
Let me tell you the problem here. You have some fat cat investors on the board of directors for Citrix who are just not satisfied with making lots of money.
These fat cats are only thinking about one thing and one thing only. And, that is to maintain and enhance shareholder value. I’m not saying they should not do that. They should. That’s the job and these executives are shielded from making decisions based on emotions.
If that direction runs counter to what Citrix customers are asking for; well that’s just too bad. And, you can put Citrix employees, channel partners and even your rank and file retail investor who have decided to put some 401K or RRSP savings on Citrix. These groups do not matter. Do you know what they are? Collateral damage!
This is why I applaud Michael Dell for going private. He and other top Dell EMC executives do not have to focus entirely on maintaining and enhancing shareholder value. They don’t have to worry about the 90-day shot clock. Nor are they forced to make decisions solely on “improving operational efficiency.”
CDN will keep you posted on when or if Citrix gets sold. And, the new buyer will have one-hell of a company on its hands.