Xerox investor urges strategic review as shares keep sliding

what happened

Shares of Xerox Holdings extended their decline on Friday, falling 9% to $1.52 by midday after a drop the previous day, and are down 36% so far this year, according to Dow Jones Newswires. Investor Starteepo Sicav, which holds 7.34% of the company, urged the board to explore strategic options for the Xerox Financial Services unit and possibly for Xerox as a whole. In an open letter, the Prague-based alternative investment fund also said it would step up talks with management and the board.

Earlier on Thursday, Xerox reported a wider third-quarter loss and shrinking free cash flow, and cut its full-year outlook for free cash flow and adjusted operating income. The company agreed to a debt exchange that extends maturities on $174 million of senior notes and reduces total debt principal. Starteepo welcomed the debt reduction and the suspension of dividends but said more needs to be done, and it reiterated that Xerox could be worth $18 a share if it pursues strategic alternatives.

why it matters

For investors, the key question is whether shareholder pressure can speed up structural change at a company whose stock has lost more than a third of its value this year. The fund says that without tougher deleveraging and operational improvements, the value could erode over time.

market impact

Xerox shares: weak guidance and activist pressure weigh, while a possible strategic review offers support

• ↔Xerox shares mixed — weak guidance weighs, while a possible strategic review could support the stock

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