Security software provider,
) is reportedly in troubled waters since activist investors and
private equity firms are rallying for a sale or split of the
Per Reuters, various private equity firms along with some
activist investors have already contacted Symantec for a possible
deal. However, no confirmations or conclusions could be derived
from the reported meetings.
Earlier, in April, Bloomberg reported that Symantec was in the
process of hiring
) to look for an alternative to and defend against activist
However, Symantec has been in difficult times of late. Its
latest chief executive officer Steve Bennett, who took over
Symantec's reigns in mid-2012, initiated several organizational
changes to improve sales and profitability.
But while the realignment of the organization's structure by
eliminating several mid-level management positions bolstered the
bottom line, sales force reorganizations are yet to yield the
desired results. On the other hand, Symantec's sales were
impacted by the disruption in customer relationships.
This ultimately led to the ouster of the CEO, which again
didn't go down well with many of the stakeholders in the
Moreover, the weak PC market has led to the company's dismal
top-line performance. Per the latest IDC report, PC shipments
will drop 6.1% in 2014, the third consecutive year of decline.
This will affect the sale of Symantec's PC security solutions and
business volume to a considerable extent.
To counter this decline, Symantec has shifted its focus to the
mobile business, which will enable it to generate additional
Moreover, Symantec is making efforts to attract small and
mid-sized businesses with the introduction of enhanced versions
of storage management and Internet security solutions. These
solutions are primarily targeted at information-driven
The company faces increased competition from other bellwethers
). Moreover, continuous investments in new products and services
in the absence of meaningful top-line growth could impact the
This could be the reason that the security company reported
negative returns both on a year-to-date basis (down 11.5%) and
from a 1-year perspective (down 14.0%) despite the rising share
market and improving economic environment.
Currently, Symantec has a Zacks Rank #3 (Hold).
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