Wall Street is taking closer notice of Xerox this week after a well-known activist investor has taken an interest in the company.
Xerox shares jumped on Monday after it was disclosed that billionaire investor Carl Icahn has bought a stake in the company, although the shares settled back on Tuesday.
Icahn now holds a 7 percent stake in Xerox. In a filing, Ichan said he believes the shares are undervalued and intends to have discussions with Xerox's board relating to improving performance and pursuing strategic alternatives.
At Brighton Securities, Chairman George Conboy says it's likely Icahn expects to have a say on the Xerox board with this big investment.
"Carl Icahn would only look to invest if he thinks he can improve the performance of the share price. He's there to make money, and if his involvement either encourages or scares Xerox management into better performance, he makes out.”
Xerox reported last month that it plans to conduct a review of its operations in the hopes of boosting value for its shareholders.
After disclosure of Carl Icahn's investment this week, the company issued a statement that said it welcomes open communication with shareholders and values constructive dialogue.
Xerox says its board and management team are committed to improving performance and creating value for the stockholders.
