Elliott Management disclosed a $1.1 billion position in Hewlett Packard Enterprise in its latest 13F filing, a threefold increase from the prior quarter, while simultaneously exiting two undisclosed technology holdings and building a significant stake in Lululemon Athletica. The moves arrive as activist campaigns targeting operational underperformance enter their spring filing window, and as enterprise infrastructure valuations trade at multi-year lows relative to cloud hyperscalers.
The HPE position now represents Elliott's third-largest disclosed equity holding, trailing only its stakes in SoftBank and Crown Castle International. The fund exited positions in two technology names—unconfirmed but market participants note the timing coincides with Elliott's prior holdings in enterprise software firms trading above 25x forward earnings. The Lululemon stake, disclosed separately under beneficial ownership rules, marks Elliott's first direct activist position in athletic apparel since its 2019 engagement with Nike's supply chain practices. Lululemon shares trade at $310, down 18% from their August 2024 peak, as the company navigates inventory overcapacity in North American stores and margin compression from promotional activity.
The reallocation matters because Elliott rarely rotates capital this abruptly without board-level intentions. HPE's enterprise storage and hybrid cloud segments have underperformed pure-play hyperscale competitors by 22% over the trailing twelve months, creating the valuation dislocation activists exploit when management credibility erodes. The company's pending $14 billion acquisition of Juniper Networks, announced in January 2024 and expected to close mid-2025, presents a natural catalyst for operational restructuring demands. Elliott's prior enterprise infrastructure campaigns—EMC in 2014, Citrix in 2015—each resulted in either strategic sales or business-unit separations within 18 months of initial stake-building.
Lululemon's exposure is narrower but no less surgical. The company's direct-to-consumer revenue mix sits at 42%, below the 55%-60% range Elliott typically demands from premium consumer brands with gross margins above 55%. Store-level productivity has declined 9% year-over-year in Q4 2024, while inventory days outstanding increased to 94 days from 78 days in the prior year. Elliott's historical consumer-brand playbooks—seen at Phillips-Van Heusen and Restoration Hardware—focus on real-estate rationalization, digital conversion acceleration, and C-suite replacements when omnichannel execution falters. Lululemon's CEO, Calvin McDonald, has led since 2018; his contract renews in December 2025.
Allocators should monitor three developments over the next 90 days. First, whether Elliott files a Schedule 13D on either position, converting passive stakes into active engagement and triggering board-nomination deadlines for the 2025 proxy season. Second, any executive departures at Lululemon's merchandising or digital leadership levels, which typically precede activist-driven restructuring proposals. Third, HPE's May earnings call, where management guidance on Juniper integration timelines will reveal whether Elliott's entry pressures deal-structure renegotiation or post-close divestitures. The fund's exits from high-multiple tech suggest it is rotating toward operational activism in companies trading at 12-15x forward earnings with clear restructuring pathways, rather than continuing to hold growth names now facing sustained multiple compression.
Elliott's 13F showed $69.7 billion in disclosed U.S. equity positions as of December 31, 2024, with the filing deadline landing eleven days into January 2025—meaning these moves were completed before year-end tax-loss harvesting concluded and before the Federal Reserve's January rate guidance shifted corporate refinancing timelines.
The takeaway
Elliott triples HPE stake to $1.1B and enters Lululemon while exiting growth tech, signaling a rotation toward operational activism in companies trading below 15x with restructuring catalysts.
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