Nuance Jumps After Investor Carl Icahn Reports 9.3% HoldingJames Callan and Olga Kharif
Nuance Communications Inc., a maker of speech-recognition software, rose the most in almost eight months after billionaire investor Carl Icahn disclosed a 9.3 percent passive stake in the company.
The shares advanced 7.9 percent to $21.77 at 9:36 a.m. New York time after jumping as much as 8.5 percent, the biggest intraday gain since Aug. 8. Nuance, based in Burlington, Massachusetts, disclosed the stake in a regulatory filing yesterday.
Icahn uses shareholdings to seek change in companies he deems undervalued or ill-managed. He has recently also focused on disrupting other parties’ investments, including Silver Lake Management LLC’s plan to take Dell Inc. private. Nuance plunged the most in more than six years in February after cutting full-year sales and profit forecasts, citing shifting demand for software. Icahn may seek to break up the company, said Tom Roderick, an analyst at Stifel Nicolaus & Co. in Chicago.
“Any time you get an activist shareholder involved, the perception is, there’s something within the structure of the company they’d like to change,” Roderick said in an interview. “More value could be unlocked by selling pieces of the company.”
Rebecca Paquette, a spokeswoman for Nuance, declined to comment. A message left outside regular business hours for a representative of Icahn wasn’t immediately returned.
Nuance said in February that transcription volume is falling as health-industry customers shift to electronic medical records and its new Dragon Medical speech-to-text software.
A contraction in the market for personal computers, exacerbated as corporate customers awaited Microsoft Corp.’s new Windows 8 software, also contributed to the forecast reduction. Economic weakness crimped in Europe as well.
Icahn, 77, has said Silver Lake’s plan undervalues Dell. He also took a stake in Herbalife Ltd. after investor William Ackman said he made a $1 billion bet the stock would fall.
Icahn, with a net worth of $19 billion, ranks 36th on the Bloomberg Billionaires Index.