Icahn Boosts Stake In Nuance Again; Activism Expected

Icahn Boosts Stake In Nuance Again; Activism Expected
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Carl Icahn bought additional shares in Nuance Communications Inc (NASDAQ:NUAN), a speech recognition and digital imaging company based on his latest regulatory filing with the Securities and Exchange Commission (SEC).

The activist investor now owns 16.03% out of the 317,750,908 outstanding shares of Nuance Communications Inc (NASDAQ:NUAN) as of April 30, 2013. Icahn’s previous stockholdings in the speech recognition and digital imaging company in the first quarter was 10.72%.

Icahn Boosts Stake In Nuance Again; Activism Expected

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Icahn going activist on Nuance

Icahn is expected to go activist on Nuance Communications Inc (NASDAQ:NUAN), as ValueWalk reported earlier based on information from sources knowledgeable about his plan in May. According to sources, the activist investor is planning to a force take over or to acquire the company outright.

Following reports of Icahn’s potential activism on Nuance Communications Inc (NASDAQ:NUAN), the management of the speech recognition and digital imaging company immediately sought the advice of Goldman Sachs Group Inc (NYSE:GS), one of the go-to firms at Wall Street when corporations feel pressure from activist investors like Icahn.

Tech giants interested in Nuance

There have been rumors in the past that tech giants Apple Inc (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT) were interested in acquiring the company.

Apple Inc (NASDAQ:AAPL) is using the speech recognition technology of Nuance Communications Inc (NASDAQ:NUAN) in its iPhone devices under the Siri feature.

Paul Ricci, chairman and CEO of Nuance Communications Inc (NASDAQ:NUAN), previously stated that their focus is to increase the value of shareholders. The board approved a shares repurchase program and expected to accelerate growth next year.

Last Tuesday, Nuance Communications Inc (NASDAQ:NUAN) reported a 9.5% revenue growth due to increased market penetration in the third quarter. The company generated $448.2 million non-GAAP revenue or $469.8 million GAAP revenue. However, the company posted a GAAP net loss of $35 million or $0.11 losses per share.  Its operating margin declined from 36.1% to 28.1%.

During the quarter, its health care segment’s revenue increased by 29% to $238.1 million, mobile & consumer solutions declined by 16.2% to $111 million, enterprise solutions went up by 5.9% to $78.9 million, and its imaging business increased by 10.6% to $62.8 million.

Commenting on Nuance Communications Inc (NASDAQ:NUAN)’s financial results, Ricci said. “Nuance’s revenue improved in the third quarter, and strong third quarter design wins and bookings in our recurring revenue streams position us well for improved performance in fiscal 2014. We continued to deliver innovative solutions and drive market penetration in strategic markets such as connected cars, voice-enabled televisions, healthcare revenue cycle management, mobile customer care and voice biometrics.”

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