Activist fund Anson takes Twilio stake, urges board to sell

Activist investor Anson Funds has built a stake in Twilio and sent a letter to the enterprise software company's board pushing for the sale of the entire business, a person familiar with the matter told CNBC.

Twilio shares rose as much as 2% on the news in Tuesday morning trading, but has since given back most of those gains.

Anson did not hold any Twilio stock for the period ending Sept. 30, according to securities filings, but has since built a stake valued at around $50 million, the person familiar said. The letter to the board urges Twilio to either sell itself or at a minimum, divest its data and applications business, the person familiar said.

The growth of the stake coincided with Anson's hiring of Sagar Gupta from Legion Partners. Gupta led Legion's activist engagements with Twilio and Nutanix, a cloud computing firm.

The news was first reported by The Information.

"Twilio regularly engages with shareholders and appreciates constructive input that furthers our goal of creating sustainable long-term value," a Twilio spokesperson told CNBC in a statement.

The continued activist attention caps off a challenging year for Twilio, which makes software that helps businesses engage with their customers. The company's stock is up around 28% year-to-date but remains well off its 2021 highs. In February, the company cut around 1,500 employees, or 17% of its workforce citing a need for heightened efficiency. Those layoffs followed a similar headcount reduction in September 2022.

The company also implemented a reorganization in February, creating two new business units: Data & Applications and Communications. A Twilio spokesperson told CNBC that the February reorganization "reflected input" from Twilio's shareholders. Nonetheless, the activist investor has urged the board to divest the former business unit if it can't secure a full sale to a strategic buyer.

Tech acquisitions, while muted compared to pandemic levels, have seen some significant plays in 2023. In March, Silver Lake and CPP Investments announced a deal to take survey software company Qualtrics private in a $12.5 billion deal. IBM acquired software maker Apptio in a $4.6 billion cash deal announced in June. Cisco said it would take cybersecurity firm Splunk private in a $28 billion cash deal in September.

CEO and co-founder Jeff Lawson helped start Twilio in 2008 and guided the company through its 2016 IPO. Twilio has a market cap of around $11.6 billion.