Is Dropboxs share price a bargain with Elliott Management in the picture?
D ropboxs [DBX] share price has been trending higher since activist hedge fund Elliott Management potentially identified the cloud storage provider as a takeover target. According to a Bloomberg report, the hedge fund, run by billionaire Paul Singer, has told Dropbox that it has amassed a near 10% stake in the company, which could be worth circa $878m. Elliott Managements motivations are unclear and talks between the two parties are said to be ongoing, with Dropbox founder Drew Houston continuing to be majority owner in the company. Still, speculation over Elliott Managements intentions is clearly being felt in Dropboxs share price. Dropbox shares have been trending below their IPO price since they went live in March 2018. While the company isnt exactly on life support  it made $1.9bn in sales last year  it has lost ground to other services like Alphabets [GOOGL] Google. The cloud storage company carries an $11bn market valuation, which is relatively modest compared to other cloud stocks. Salesforce [CRM], for example, has a valuation of $223bn. There had also been talk of a larger cloud company targeting Dropbox, similar to Salesforce scooping up Slack last year. $1.9billion Valuation of Dropbox's sales last year  Cara Lombardo, writing in the Wall Street Times, suggests that activist investors typically avoid investing in companies with a strong leader; Elliott Management has broken that mould several times, notably by investing in Twitter [TWTR], headed by Jack Dorsey. In February 2020, Elliott Management took a 4% stake in Twitter, arguing for an upturn in performance from the social media company. This included a campaign to oust Dorsey from his CEO position after he announced plans to move to Africa  the hedge fund wasnt pleased that Dorsey divides his time between managing Twitter and Square [SQ]. A change in leadership at Twitter was avoided after Dorsey said he would reconsider, with Elliott Management and Silver Lake Investments nabbing seats on the Twitter board. A management committee was also put in place, with tough performance goals set for Dorsey. Agitating for tougher management governance and even a change at the top could also be on the hedge funds agenda for Dropbox. Investors seem to be welcoming the hedge funds interest, with Dropboxs share price up 8.43% since the story first broke (through 9 June). Dropbox closed trading at $29.35 on 8 June  above its IPO price and at a level not seen since August 2018. Simply Wall Street reckons that Dropboxs share price is a bargain right now, suggesting the stock has an intrinsic value of $38.52  32.5% above Tuesdays close. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Dropboxs share price may be quite stable relative to the rest of the market, as indicated by its low beta, wrote Simply Wall Street. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Dropboxs share price may be quite stable relative to the rest of the market, as indicated by its low beta - Simply Wall Street  The Wall Street Journals Carleton English picks up on Dropboxs relative cheapness, commenting that the company was valued at $10bn before going public in 2018  a valuation it spent most of last year below. Dropbox has spent most of the last year under the $10 billion level it landed in private transactions. That has made them the cheapest among cloud-software providers, with multiples around five times forward sales, writes English. A forward price to earnings ratio of 19.16X is far from the most expensive out there among cloud stocks  Alphabet carries a 25.94X multiple, Salesforce has a toppy 55.12X multiple and CrowdStrike [CRWD] has an eye-watering 312.19X. Among the analysts tracking Dropboxs share price on Yahoo Finance, the stock has a $30.50 price target  hitting this would see a 5% upside on 9 Junes close. As the market gets drip-fed more information about the stock, Dropboxs share price could continue to gain, meaning it could be a bargain right now.