If you know Xerox for printers and toner, meet the new character in its story: Starteepo. The Prague alternative investment manager, led by Frantisek Bostl, said Tuesday it holds 7.34% of Xerox, confirming an earlier Bloomberg News scoop. Starteepo first revealed a meaningful position in May and added more in July.
The firm wants Xerox to lighten its debt load and be stricter with how it uses cash. Xerox, headquartered in Norwalk, Connecticut, produces printers, scanners, supplies and accessories, and a company representative did not immediately provide comment Tuesday.
The ask centers on Xerox's in-house lender that finances customer purchases. Starteepo wants the company to break out that unit's numbers in earnings and spell out a strategy for it no later than the third-quarter report, arguing that clearer disclosure would help the market recognize the business's value. The investor is also calling for advisers to run a formal review that looks at multiple paths, including a joint venture, bringing in a strategic capital partner, an outright sale, and alternative funding structures.
One option on the table: an "optimized capital structure" where outside financing for the portfolio comes from a third party while Xerox keeps the servicing and customer ties. Starteepo points to peer examples at HP and General Electric for how such capital finance models can work.
Bostl estimates the finance unit's value at $7.69 per share - an amount that exceeds the company's current stock price by more than two times. He also wrote that, with the proposed steps, Xerox could reach $3.3 billion in equity value, or more than $18 a share. "By every measure, the business has improved in the past four months," he wrote, adding that the company's enterprise value is lower today than when Starteepo first went public with its position.
At Tuesday's open in New York, the shares climbed as much as 6.9% to 3.55 dollars, then retraced to 3.38 dollars by 10:00 a.m. Heading into the announcement, Xerox shares were down about 13% over the past year, putting the market value around 418 million dollars. "Ultimately, we see a deleveraged and re-rated Xerox as better able to participate in industry consolidation and command a premium valuation," Bostl wrote.
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Starteepo was founded in 2017 and has invested in names like Warner Bros. Discovery and Western Digital. It is not the first to push Xerox to change course.
Back in 2015, Carl Icahn pressed the company to evaluate options and improve operations while seeking board seats. Xerox later moved to split into two public companies, separating services from hardware, and granted Icahn three seats. He exited in 2023 by selling his remaining stake back to the company for 542 million dollars.
Credit investors are watching too. In June, Converium Capital Inc. stated it finds value in Xerox's bonds, with managing partner and CIO Aaron Stern arguing they are mispriced because of a "messy" capital structure and "Frankenstein balance sheet."
This is a classic sum-of-the-parts debate: clearer reporting on the finance arm, a structured review of options, and a plan to cut debt could change how the market values the whole business. Whether Xerox follows through is the open question, but the quick stock pop shows how transparency and capital structure moves can reset expectations for everyday shareholders.
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