Twilio might actually deserve activist investor attention

Its banal is worthy conscionable a fraction of nan 2021 peak

Twilio by most accounts would beryllium considered a startup occurrence story. But aft peaking astatine $400 a stock successful September 2021, erstwhile everyone was riding imagination valuations, nan institution has knowledgeable a agelong plunge to astir $66 a share. That benignant of capacity tends to get nan attraction of activistic investors, truthful possibly it’s nary astonishment that Anson Funds and Legion Partners are reportedly turning nan screws connected nan company.

The communications API institution appeared to beryllium reacting to that unit by cutting costs, which successful firm speak translates into laying disconnected different 5% of its workforce Monday morning. As nan banal value has fallen, truthful has nan number of employees; nan announcement comes a small complete a twelvemonth aft nan institution trim 11% of nan workforce successful September 2022 and 17% successful February 2023.

But this information seems much for illustration Twilio is throwing nan activistic dogs a bony by showing it could get moreover leaner still. Laying group disconnected during nan holidays isn’t a awesome look, but pinch investors breathing down its neck, possibly nan executive squad felt it had small choice.

At nan tallness of its valuation, Twilio made immoderate large moves. In 2018, it purchased SendGrid for $2 billion, and successful 2021 it bought customer information level Segment for $3.2 billion. Both moves were designed to harvester customer information pinch nan communications information nan institution was collecting via its halfway communications APIs.

Whether that worked is still unfastened to debate, but pinch nan banal value successful nan $60s, it feels royal successful retrospect. At nan clip pinch truthful overmuch value, it was worthy trying to grow nan company’s capabilities. Today, not truthful much.

With 2 activists putting connected nan pressure, and nan banal value plunging, it leaves nan institution successful a susceptible position. This conflict feels much for illustration Zendesk’s, which ended up being sold disconnected to backstage equity, than Salesforce’s, wherever it yet fended disconnected its activists.

The large mobility present is whether nan dramatically little banal price, nan questionable acquisitions and different bad financial information points mean this is simply a lawsuit wherever nan activists person a point. And if they do, what does it mean for Twilio?

Activists mixing it up

Any measurement you look astatine it, nan institution has faced awesome instability of late. CEO Jeff Lawson announced successful February that he was splitting nan institution into 2 units. He named Elena Donio to tally nan information and apps broadside of nan house, which includes Segment.  She announced that she would beryllium stepping down later this period during nan company’s Q3 2023 net call.