Kevin O'Leary Applauds Activist Stake In Wix Stock: 'They Stop Idiot Management From Making Stupid Mistakes'

Wix.com Ltd WIX shares are surging Monday after Starboard Value disclosed a 9% stake in the cloud-based web developer.

"Shark Tank" investor and O'Shares ETFs chairman Kevin O'Leary applauded the activist stake Monday on CNBC's "Fast Money Halftime Report."

What To Know: Activist investors were fairly unpopular five years ago, but that's not the case today, O'Leary said. 

"Shareholders welcome them, and for a very singular reason: they stop idiot management from making stupid mistakes," he said. 

Adobe Inc ADBE shares have trended lower since the company announced a deal to buy Figma for approximately $20 billion last week.

"Had we had an activist manager there 60 days ago, they would have never blown their brains out the way they did on this acquisition," O'Leary said. 

Activist investors help to hold management accountable, he said: "Scrutinize every decision, squeeze management's heads, that's fantastic. We need more of this. This is good for stocks."

Related Link: Activist Investor Fund Starboard Procures Stake In Wix

Why It Matters: O'Leary owns Wix shares and despite big gains in the name on Monday, he isn't trimming his position. 

"I believe in the mandate. This is a service that's going to be around forever. The more we go cloud, the more you need Wix," O'Leary said.

He told CNBC that Wix also has a solid balance sheet and is growing at a "phenomenal" rate, but his renewed confidence is coming from the activist stake. 

"I own the stock because I want to have enhanced value. That's why I'm in it. Now I have an ally on the board table in Jeff [Smith] and his team. I love this. I'm very, very happy," O'Leary said.

WIX Price Action: Wix has a 52-week high of $163.39 and a 52-week low of $53.12.

The stock was up 14.3% at $84.28 at the time of publication, according to Benzinga Pro.

Photo: Ontario Chamber of Commerce from flickr