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Twilio Sinks on Q4 Earnings

Twilio (NYSE:TWLO) announced alongside its fiscal fourth quarter earnings on Wednesday it would begin an operational review of an underperforming business unit that has been scrutinized by shareholder activists to “identify the appropriate path forward”

The company also said it had recorded a $286-million impairment related to the business unit, which it was also renaming back to Segment. It had formerly been known as Twilio Data & Applications, and was born out of Twilio’s $3.2 billion acquisition of the namesake Segment in 2020.

Twilio has been the subject of shareholder scrutiny over the performance of its Segment business, which it acquired at a large premium to its private-market valuation and has dragged on the performance of Twilio’s longer-standing communications business. Activist investors at Anson Funds and Legion Capital have both said they would like the company to sell off either the Segment unit or the whole company.

The first activist campaign kicked off shortly after founder Jeff Lawson’s supervoting share block expired. Lawson was ultimately ousted as chair and CEO and replaced as CEO in January by Khozema Shipchandler.
Shipchandler at the time said the company would take a “fresh look at the areas of the business that are underperforming to realize” Twilio’s full potential.

TWLO shares stumbled $10.16, or 14.1%, to begin Thursday at $62.11

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