Shares of Workday popped 9% on Wednesday to around $238 after activist investor Elliott Investment Management announced a $2 billion stake in the company.
Workday announced a multi-year plan to enhance its operating model and capital allocation framework on Tuesday, and Elliott said it believes the plan will drive “substantial long-term value creation.”
“We believe CEO Carl Eschenbach, CFO Zane Rowe and the entire Workday team have made substantial progress in recent years, positioning Workday as a unique software franchise with industry-leading growth potential, best-in-class customer retention and a proven management team,” Elliott said in a release on Tuesday.
“We appreciate Elliott’s support,” a Workday spokesperson told CNBC in a statement. “Workday is a market leader with strong growth potential, and we remain focused on executing our strategy and delivering innovative solutions that help our customers succeed.”
Workday provides software for finance and human resources departments.
Last month, Workday said it would acquire Paradox, a company that offers conversational artificial intelligence software for recruiting. Workday did not disclose the terms of the deal.
Workday shares are down roughly 15% year to date. The company’s market cap sits at about $63 billion.
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