The share price of Xerox (XRX) climbed more than 3% on Thursday following a disclosure by alternative investment firm STARTEEPO Invest that it has raised its stake in the company to over 6%.

According to an amended filing submitted by STARTEEPO to the U.S. Securities and Exchange Commission, the fund now beneficially owns approximately 8 million common shares of Xerox and holds options for an additional 140,000 shares, making it the company's third-largest shareholder.

In a statement, STARTEEPO's Board Chairman Frantisek Bostl described Xerox as a high-conviction investment for the fund and one of the largest positions in its portfolio.

He noted that investment confidence is growing as the company advances its restructuring plan, the integration of Lexmark, and management's efforts to improve profitability and the balance sheet.

STARTEEPO also suggested that Xerox's recently announced warrant structure might provide a unique opportunity for deleveraging, as the potential exercise of warrants following a share price rise could bring in new equity capital and correspondingly reduce outstanding debt.

Recent performance at Xerox has indeed shown signs of improvement.

The company's first-quarter results revealed an adjusted operating margin of 3.9%, a 240 basis point increase year-over-year, with adjusted operating income reaching $72 million, up $50 million from the prior year.

The company reaffirmed its full-year free cash flow guidance of approximately $250 million.

On the strategic front, Xerox is actively positioning itself in AI-driven document workflow and intelligent document processing, investing through a dedicated business unit in AI-powered document solutions, content management, and Internet of Things services.

In Quocirca's 2026 assessment of automation, AI, cloud, and technology, Xerox was rated as a leader.

The management team believes the company is closer to an inflection point than external narratives suggest.

However, some views maintain a cautious stance on STARTEEPO's strategy.

Xerox currently carries total debt of about $4.4 billion, reported a net loss of $105 million in the first quarter, and had negative free cash flow of $165 million.

Analysts point out that this is a company consistently losing money in a structurally shrinking market, and while STARTEEPO's involvement indicates investor belief that management can be pushed toward change, it remains uncertain whether this is sufficient to rescue a shrinking franchise.