Update 3:42pm : Adds New York Times response to ValueAct stake.
New York Times ( NYSE: NYT ) soared 10% after activist investors ValueAct reported a 6.7% stake in the newspaper giant.
ValueAct disclosed owning over 11 million shares, according to a 13D filing. The stake would make the investor one of the newspaper's five largest. ValueAct acquired the shares from mid June through Wednesday.
ValueAct said in the filing that it acquired the shares on its belief that the securities are undervalued and represented an attractive investment opportunity. The investor has had and expects to have additional discussions with officers and directors of the New York Times ( NYT ) in regard to its investment. NYT shares have dropped 34% this year through Wednesday.
ValueAct said the topics of its talks with the newspaper include management, board composition, dividend policy, financial condition, mergers and acquisitions strategy, overall business strategy, executive compensation, and corporate governance, according to the filing.
ValueAct is arguing that the newspaper needs to have a more aggressive rollout of its subscriber-only products such as the Athletic and crosswords and games, according to a letter ValueAct wrote that was obtained by Bloomberg.
“Our research suggests that most current readers and subscribers are interested in the bundle and would pay a large premium for it but are not aware the offering even exists,” ValueAct said in the letter.
ValueAct argues that over time there is the potential for the newspaper company to see double-digit digital revenue growth and margins expand by as much as three times, according to the Bloomberg report.
"As we do with other shareholders, members of out management team have had conversations with ValueAct to hear their views and share ours," the New York Times ( NYT ) said in a statement to CNBC. "The Board and management team will continue to make decisions that they believe are in the best interest of the Company and all Company shareholders."
Earlier Thursday, New York Times gained on activist speculation.
For further details see:
New York Times jumps 10% after activist ValueAct takes stake (update)