What Happened?
Shares of financial automation platform BILL (NYSE: BILL) jumped 3.7% in the morning session after the Financial Times reported that activist investor Elliott Management has built a large stake in the payments automation company.
This development follows a similar move by another activist firm, Starboard Value, which previously acquired an 8.5% stake and is actively pushing for changes by nominating four candidates to the company's board of directors. The increased interest from prominent activist investors comes as the broader payments sector has seen a pickup in potential acquisitions, with larger companies looking to buy smaller rivals whose valuations have fallen in recent years. The presence of two major activist funds could increase pressure on the company to consider strategic changes, including a potential sale.
After the initial pop the shares cooled down to $52.63, up 3.4% from previous close.
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What Is The Market Telling Us
BILL’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 9.3% on the news that a report revealed that activist investor Starboard Value has acquired a significant stake of over 8% in the financial automation software company. Starboard, known for pushing for changes at companies it invests in, is reportedly preparing a boardroom challenge and may nominate new directors at the next shareholder meeting. The activist's involvement has fueled investor optimism, with speculation that Starboard will advocate for strategic and operational improvements. Furthermore, the move has sparked discussion that BILL could become an attractive acquisition candidate, especially since several of its industry peers have recently been acquired. In response to the news, BILL's management confirmed they have been in contact with Starboard and intend to engage with them to understand their views, stating they are committed to long-term value creation for all shareholders.
BILL is down 37.4% since the beginning of the year, and at $52.63 per share, it is trading 46% below its 52-week high of $97.41 from December 2024. Investors who bought $1,000 worth of BILL’s shares 5 years ago would now be looking at an investment worth $576.45.
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