Twilio Stock (NYSE:TWLO)
Twilio (NYSE:TWLO) stock increased by 10% after publishing a report indicating that activist investor Legion Partners has met with the firm in question and is urging improvements.
According to a story published on Tuesday in The Information, which quoted individuals who are aware of the issue, Legion Partners has reportedly had many meetings with the board and management and is pressuring the firm to make changes to the board and consider potential divestitures.
According to RBC analyst Rishi Jaluria, who has a sector perform rating and a $55 price target on Twilio stock, “we think that there is a good underlying asset and, despite checks indicating incremental commoditization of the core CPaaS market,” Twilio still has time to leverage its large installed base and move up the stack with higher-margin Data & Applications.
Jaluria contends that an activist may exert pressure on the company to change its management and board of directors, prioritize integrating Segment, divest Flex, and investigate the possibility of selling Twilio altogether. Even if only a few strategic purchasers make sense as acquirers, such as Amazon Web Services, Twilio may be an appealing target for a bigger platform.
According to a report from The Information, the Legion negotiations with the board and management occur at a key moment for Twilio, as the usage of supervoting shares is about to expire in less than a month. In the past, other activists have mulled the possibility of taking action against Twilio; nevertheless, the problem of supervoting shares was seen as a barrier.
Although Legion Partners has expertise as an activist in the CPaaS space, the special circumstances perspective for Twilio (NYSE:TWLO), according to a report written by a Barclays analyst named Ryan MacWilliams, needs to be more straightforward. MacWilliams brought attention to the fact that Legion had previously been involved with Vonage and got a board seat in 2019. The following year, in 2022, Vonage was acquired by Ericsson. TWLO is assigned an equivalent weight by Barclays, and the price objective is set at $50.
According to the most recent 13F filing that Legion Partners submitted, the firm owns 600,000 Twilio stock.
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Author Shariq Khan 
