Carl Icahn Just Upped His Bet on Xerox (XRX) Stock. Here’s Why.

Xerox (NASDAQ:XRX) is in the spotlight after famed activist investor Carl Icahn reported purchasing 2.13 million shares of the company. This comes as shares of the workplace technology company have fallen more than 20% year-to-date.

A Xerox (XRX) sign on an office building in Montreal, Canada.
Source: BalkansCat / Shutterstock.com

Xerox reported Q1 earnings on April 21. Revenue came in at $1.67 billion, which was down 2.5% year-over-year (YOY), or down 0.7% YOY on a constant currency basis. Meanwhile, earnings per share (EPS) tallied in at -38 cents, which was down 56 cents YOY.

However, it appears that Icahn was satisfied with the earnings, since he purchased shares after the results were disclosed. Let’s jump into the details.

Carl Icahn Just Bought More XRX Stock

According to a Form 4, Icahn has purchased shares of Xerox twice this month. On April 22, he purchased 1.34 million shares at an average price of $16.96 per share. In total, the purchase amounted to $22.83 million. That’s no small purchase.

Icahn purchased more shares of Xerox three days later. On April 25, Icahn purchased an additional 783,900 shares at an average price of $17.17 per share. In total, the transaction amounted to $13.45 million. After the purchase, Icahn now owns 34.24 million shares, or 22.11% of all shares outstanding. The share count makes Icahn the largest shareholder of Xerox by a wide margin.

Between April 22 and April 25, Icahn purchased about $36 million worth of Xerox. It should be noted that Icahn purchased these shares indirectly through entities with which he is affiliated, such as Icahn Enterprises and Icahn Capital.

In addition, this is the first time that Icahn has purchased Xerox since Q4. As of Q4, Icahn Enterprises owned 32.11 million shares.

Who Else Is Betting Big on Xerox?

Tracking aggregate institutional ownership is important, as these large funds provide liquidity and price support for stocks. During Q4, 332 funds reported owning Xerox, a decrease of one fund from the prior quarter. Furthermore, the company carries an institutional put/call ratio of 0.24, which means that funds own more call options against the company than put options. With that in mind, let’s take a look at the five largest shareholders:

  1. Carl Icahn: 34.24 million share, or 22.11% ownership.
  2. Vanguard Group: 13.61 million shares, or 8.79% ownership.
  3. BlackRock (NYSE:BLK): 13.18 million share, or 8.51% ownership.
  4. Dimensional Fund Advisors: 6.73 million shares, or 4.34% ownership.
  5. LSV Asset Management: 6.13 million shares, or 3.96% ownership.

It should be noted that Darwin Deason owns 15.28 million shares, which would make him the second-largest shareholder. In 2010, Deason sold Affiliated Computer Services to Xerox for $6.4 billion. However, Deason’s position is only accurate as of Q1 of 2021.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


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