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ACTIVISTS AT THE GATE: CAN FINTECH'S UNDERVALUED STARS BE RESCUED?

In the bruised corners of the payments sector, activist investors are making their presence felt. With valuations at multi-year lows, companies like Global Payments GPN.N, BILL Holdings BILL.N and WEX Inc WEX.N are being sized up not for their current performance, but for what they could become under new pressure.

But is this wave of activism a catalyst for real change or just a temporary jolt?

KBW analysts caution against expecting miracles. "We see no obvious silver bullet for activists at BILL, GPN, or WEX," they write, noting that past campaigns offer mixed results.

Activist investors aren't miracle workers - but they are catalysts. Their campaigns often inject optionality into stagnant stocks, forcing strategic reviews, leadership changes, or asset spin-offs that can unlock value, even if temporarily.

For BILL, the dilemma is stark, cut costs or invest in tech to close its perceived gap.

KBW notes that this tension "could make strategic alignment with management a potential challenge." At WEX, spinning off its healthcare unit remains a complex but tempting option, though management still views it as a key growth asset.

And for Global Payments, the most likely activist lever is execution oversight. Elliott Investment Management has already influenced board changes to enforce discipline.

Looking back, Elliott's push at PayPal Holdings PYPL.O led to cost cuts and a CEO shake-up, but "PYPL's stock price has not recovered above 2023 levels," reflecting deeper structural issues.

At Fidelity National Information Services FIS.N, D.E. Shaw's involvement triggered the sale of Worldpay, briefly lifting shares before they slid again. Meanwhile, ValueAct's bet on Clover at Fiserv Inc. FI.N stands out as a success, with "a significant re-rating in the stock over a multi-year period."

(Rashika Singh)

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