In our recent analysis, we unveiled a list detailing Jeff Smiths Top 10 Activist Targets and their comparative returns against the S&P 500. This article delves into how GoDaddy Inc. (NYSE:GDDY) fares in relation to the other prominent activist targets championed by Smith.

Jeff Smith has earned the reputation of being one of the most formidable figures in corporate America, often described as the most feared man on Wall Street. His legacy is marked by some of the most aggressive and successful activist campaigns in the business world. His extensive experience is evidenced by his tenure on the boards of over 17 companies and his role as chair of four, reinforcing his status as a leading activist investor dedicated to unlocking shareholder value.

Smith co-founded Starboard Value LP, a hedge fund launched in 2011 alongside two partners, which has since gained notoriety for its strategic approach to investing. The hedge fund has targeted hundreds of companies, utilizing in-depth analysis to pinpoint stocks that are undervalued and trading below their fair market value.

As part of its investment strategy, Starboard Value LP is known for initiating activist campaigns that advocate for significant strategic changes intended to enhance company valuations. This often involves pushing for board seats or advocating for management changes to align company operations with shareholder interests. The hedge fund has a reputation for agitating for the potential sale of individual divisions or even the entirety of a company, all in pursuit of maximizing shareholder value.

Over the past decade, Jeff Smith has focused on technology giants and consumer cyclical stocks, leading to a substantial increase in Starboard Value LP's assets under management, which now exceed $5.5 billion. This remarkable growth can be attributed to the average market valuation of companies the hedge fund has invested in, which has surged from about $7 billion in 2020 to over $45 billion today.

Starboard Value LP has established itself as a formidable force, often making life challenging for executives and board members who oppose its proposed changes, occasionally resulting in dismissals. However, Jeff Smith's approach sharply contrasts with that of his more confrontational peers like Carl Icahn and Bill Ackman. Instead of a purely adversarial model, Smith has sought to understand the companies he invests in deeply. For instance, after being appointed chair of Darden Restaurants, he actively engaged in their operations, even mastering pizza-making at Papa Johns restaurants, which he chaired before launching an activist campaign aimed at unlocking value.

Despite the hedge fund's reputation and Smith's strategic prowess, Starboard Value LP experienced a disappointing return of less than 5% for investors in 2024, falling short of its competitors. This underperformance came during a tumultuous year for corporate America, characterized by significant upheaval in boardrooms as activist investors aggressively sought change. To put things into perspective, during 2024, activist funds collectively achieved an average return of 11.5%, while competitors like ValueAct Capital Management reported a remarkable 21% increase, and Sachem Head Capital Management garnered around 22%, bolstered by the artificial intelligence-driven market surge.