Starboard stated that shares of GoDaddy, which is engaged in hosting and selling other web services to businesses, were undervalued and represented an attractive investment for the company
Starboard Value has acquired more than 10,000 shares of GoDaddy. (Credit: Photo Mix from Pixabay)
Activist investor Starboard Value has acquired a 6.5% stake in US-based web services firm GoDaddy for about $800m.
In a regulatory filing, the hedge fund firm said that it has acquired more than 10,000 shares of GoDaddy.
Tempe, Arizona-headquartered GoDaddy is engaged in hosting and selling other web services to enterprises. It also sells domain names.
Starboard stated that GoDaddy’s shares were undervalued and represented an attractive investment for the company.
The firm plans to push the company to boost the performance of the domain registrar, which has a market valuation of about $12.7bn, The Wall Street Journal reported.
Founded in 1997, the web services company was sold to private-equity firms KKR, Silver Lake Partners and Technology Crossover Ventures in 2011.
GoDaddy has witnessed a sharp rise in the demand for web services in recent months, as businesses increasingly move to digital operations due to the Covid-19 pandemic, Reuters reported.
For the three months ended 30 September 2021, the company reported a 14% increase in its revenue to $964m.
During the quarter, GoDaddy launched its OmniCommerce solution for Websites + Marketing with advanced point-of-sale devices, integrated payments and other solutions.
GoDaddy reported that annualised gross merchandise volume (GMV) across its ecosystem was approximately $25bn in the July-September quarter, a 30% increase on a year-on-year basis.
In November this year, GoDaddy CEO Aman Bhutani said: “GoDaddy stepped out on the commerce stage in a big way with the hardware and payments offerings we launched in Q3.
“New solutions like these, combined with a consistent, cash-generative business, give us confidence in our ability to pursue new opportunities and drive profitable growth at scale.”
In July this year, the company has partnered with Google to help small businesses to increase their online sales.
The integration with Google is aimed at enabling GoDaddy customers to get discovered across Google surfaces from GoDaddy’s Online Store.
According to GoDaddy, the offering allows customers to scale their businesses and reach millions of new shoppers via Google.