On March 7, activist investor Mantle Ridge disclosed a stake exceeding $1 billion in consultancy firm Cognizant Technology, asserting that its shares are undervalued, as reported by the Wall Street Journal.
Following this news, Cognizant's shares, with a market capitalization exceeding $41 billion, surged over 5% in after-hours trading.
Mantle Ridge initiated share purchases of Cognizant in the latter half of 2022 when the stock ranged from high $50s to low $60s per share.
Engaging privately with Cognizant regarding strategies to enhance the share price, Mantle Ridge signaled support for the management and Board, according to sources familiar with the matter.
Despite Cognizant's recent forecast affected by soft spending in its IT businesses due to economic uncertainties and high interest rates, the company stated that Mantle Ridge has been engaging constructively since mid-2024.
Mantle Ridge, breaking its tradition of discreet dealings, is adopting a more visible approach at Cognizant and has no immediate plans to nominate directors to the board.
The firm intends to maintain close collaboration with Cognizant's management, emphasizing its belief in the company's growth potential.