(Reuters) - Hedge fund Starboard Value LP is preparing to launch a board challenge against Box Inc unless the U.S. cloud services provider takes steps to boost value for shareholders, according to people familiar with the matter. Box has become an activist investor target after it failed to capitalize on the work-from-home trend during the COVID-19 pandemic as many of its cloud computing peers have done. Its shares have barely risen since the company’s initial public offering six years ago, and are up just 9% in the last 12 months, underperforming the 33% rise in the S&P 500 Application Software index over the same period. Starboard invested in the Redwood City, California-based company in 2019, and in March 2020 it agreed not to launch a board challenge that year in exchange for Box replacing three of its directors with three independent candidates. Box also set up a board committee to identify opportunities to boost growth and improve margins. It embarked on a cost-cutting drive that boosted profitability, yet its revenue growth has been anemic as corporate customers turn to competitors such as Microsoft Corp, which offers its OneDrive data storage solution as part of its Teams collaboration platform at no additional cost. Starboard wants Box to take more steps to reinvigorate revenue growth, as well as explore potential acquisition interest in the company from other technology firms and private equity firms, the sources said. Three out of nine Box directors, including the company’s co-founder and chief executive, Aaron Levie, are up for election at the company’s annual shareholder meeting this spring, and Starboard is exploring putting forward candidates for all three seats if it does not see enough progress, the sources said. The sources requested anonymity because the matter is confidential. “Box is committed to maintaining an active and engaged dialogue with all of our stockholders, including Starboard. Last year we worked constructively with Starboard on an agreement, including adding three new independent board members, and today the board of directors and management team remains focused on driving long-term stockholder value,” a Box spokesman said. Starboard declined to comment. Box shares jumped 8% to $19 on the news, giving the company a market value of more than $3 billion. Demand for secure file-sharing services online has skyrocketed since the onset of COVID-19, driven by the information technology needs of companies whose employees are working from home. While Box has benefited from this trend, it has struggled to fully capitalize on it, as some of its services and products are offered by competitors either for free or at a lower cost. Box beat fiscal third-quarter sales expectations in December with an 11% year-on-year jump in revenue. Yet it gave guidance for revenue growth in 2021 of about 10% that was below most analysts’ estimates. The company is scheduled to report earnings for its fiscal fourth quarter that ended Jan. 31 on March 2. Starboard disclosed last month it had a 7.9% stake in Box. Led by hedge fund veteran Jeffrey Smith, it has pushed for changes at several technology companies, from chip makers Marvell Technology Group Ltd and ON Semiconductor Corp to cybersecurity firm NortonLifeLock Inc and internet services firm Yahoo Inc. On Monday, a blank-check acquisition firm sponsored by Starboard agreed to take data center provider Cyxtera Technologies Inc public at a $3.4 billion valuation.