Why Is Twilio Stock Trading Higher Tuesday?

Activist investor Anson Funds has acquired a stake in Twilio Inc TWLO, the enterprise software company, and is pushing for its sale, sending the stock price up. 

Anson, which did not own Twilio shares as of Sept. 30, has since amassed a stake worth approximately $50 million. The investor sent a letter to Twilio's board, advocating for a complete sale of the company or, at the very least, the divestiture of its data and applications business, according to CNBC, which cited a source familiar with the developments. 

This move follows Anson's recruitment of Sagar Gupta, previously with Legion Partners, known for his activist roles in companies like Twilio and the cloud computing firm Nutanix.

A Twilio spokesperson told CNBC that the company recognizes the importance of regular communication with its shareholders and appreciates constructive feedback that contributes to long-term value growth.

Also Read: Twilio Poised For Gradual Improvement Despite Challenges, Revenue Growth And Margin Expansion Key Focus

Despite a 28% increase in its stock year-to-date, Twilio's shares are still significantly below their 2021 peak. 

The company recently faced challenges, including layoffs of about 1,500 employees (17% of its workforce) in February for efficiency reasons, following a similar reduction in September 2022.

In February, Twilio restructured into two new business units: Data & Applications and Communications, a move influenced by shareholder input. 

However, Anson Funds urges the board to sell off the Data & Applications unit if an entire company sale isn't feasible. 

Twilio, founded in 2008 by CEO Jeff Lawson and publicly listed since 2016, has a market capitalization of around $11.8 billion.

Price Action: TWLO shares were trading higher by 3.9% to $65.28 at last check Tuesday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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