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    QONEQT in News

    17-Sep-2022 06:03 AM


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    Starboard builds stake in website development platform Wix

    By Svea Herbst-Bayliss

    NEW YORK (Reuters) -Starboard Value LP has built a 9% stake in website development platform Wix (NASDAQ:WIX).com Ltd, the activist hedge fund disclosed in a regulatory filing on Friday.

    Starboard had been building the stake, and spoke to Wix about how it can improve operations, Reuters reported earlier in the day, citing sources familiar with the matter.

    Wix has been struggling with losses since the fourth quarter of 2021 amid a slowdown in e-commerce driven by rampant inflation and people making fewer purchases online in the wake of the COVID-19 pandemic. It has adopted a three-year cost-cutting program in a bid to boost its ailing stock price.

    Starboard supports Wix's bid to become profitable and believes the company has a significant opportunity to improve its margins and grow further, sources said.

    The fund has been discussing its ideas with Wix's management and is not seeking board seats at this time, the sources added. Details of Starboard's suggestions to Wix could not be learned.

    The sources requested anonymity because the matter is confidential. Wix and Starboard did not immediately respond to requests for comment.

    Wix, an Israel-based company whose stock is listed in the United States, has a market value of roughly $4.4 billion. Its shares have lost 54% of their value this year on concerns about clients not paying enough for its products. The company posted a loss for the three months to the end of June of $111.2 million, compared to a $37.6 million profit in the corresponding period in 2021.

    Wix had 222 million registered users worldwide using its website development tools, many of them for free, as of the end of December. Out of those, only 6 million had premium subscriptions.

    Wix has announced cost cuts it projects will save $150 million a year and grow its profit margins. The company also authorized a $500-million share buyback program.

    Starboard, which is led by Jeff Smith, is one of the industry's most prominent activist investors and is widely known for its operational expertise. It is also an investor in another website development services company, GoDaddy (NYSE:GDDY) Inc, where it amassed a stake last year.
    Source: Investing.com