April 27 (Reuters) – Activist investor Starboard Value has taken a major stake in AI software maker Dynatrace and is advocating for strategic changes to help boost its share price, the Wall Street Journal reported on Monday, citing a draft of a letter by a senior executive.
The draft letter by Starboard managing member Peter Feld, expected to be sent to Dynatrace on Tuesday, noted that the company’s stock is undervalued compared with its industry peers, according to the WSJ report.
Following the news, shares of Dynatrace jumped 8% during after-hours trading.
Starboard has already become one of Dynatrace’s top five shareholders and has been engaging privately with the company’s leadership in recent months.
The company believes Dynatrace’s shares have struggled due to slowing revenue growth and investor concerns about near-term performance, the WSJ report said.
Reuters could not immediately verify the WSJ report.
Starboard Value and Dynatrace did not immediately respond to Reuters’ request for a comment outside regular business hours.
Shares of Dynatrace have fallen more than 17% so far this year, despite the Massachusetts-based company raising its 2026 revenue outlook to between $2.005 billion and $2.010 billion, from previous forecast of $1.985 billion to $1.995 billion.
Starboard believes that Dynatrace should accelerate its share buyback program, suggesting the company could return more than $2.5 billion within three years, the WSJ report said.
Dynatrace had already announced a $1-billion share repurchase plan in February.
Activist investors acquire stakes in companies primarily to influence management and drive changes that boost the stock price and increase shareholder value.
(Reporting by Fabiola Arámburo in Mexico City; Editing by Sherry Jacob-Phillips)
Comments