Filing: activist investor Starboard Value built a 9% stake in Wix, which is struggling with losses since Q4 2021 and adopted a three-year cost-cutting program
Svea Herbst-Bayliss / Reuters :
Context & Ripple Effects
Starboard Value is not a newcomer to forcing change at large internet companies: its 2016 campaign at Yahoo ended in a settlement that put four directors, including Starboard CEO Jeff Smith, on the board via an activist settlement that added four directors. The new filing showing a 9% Wix stake lands on a company already moving — Wix has been posting losses since Q4 2021 and has adopted a three-year cost-cutting program of its own.
First-order effects
- Wix's existing three-year cost-cutting program now runs under activist scrutiny, raising the odds the plan gets accelerated or expanded rather than left to management's own pace.
- The disclosure alone reprices Wix: a 9% position by a fund with Starboard's track record signals to the market that losses since Q4 2021 are no longer tolerable without structural response.
Second-order effects
- Other loss-making subscription software names become screening targets — within a month Starboard revealed a significant stake in Salesforce, whose shares had fallen more than 40% in 2022, and it later took positions in Autodesk and Qorvo.
- Wix's earlier acquisition spending, such as the $36M cash purchase of DeviantArt in 2017, comes back into view as activists question whether past growth bets justify current burn.
Third-order effects
- If the pattern holds — Yahoo board seats in 2016, then Wix, Salesforce, Autodesk, Qorvo — activist funds become a standing enforcement layer over the subscription-software model, pushing boards toward margin discipline before shareholders force it.
The trend: Activist investors are systematically targeting unprofitable subscription software companies, converting prolonged post-growth losses into forced cost programs and board-level accountability.