Irenic Capital Calls Board Changes, Sale for Workiva Amid Share Price Slump

Irenic Capital Management, holding approximately 2% of Workiva's shares, is calling for significant strategic changes to address the company's underperformance relative to its peers. The investment firm advocates for a revamped board to conduct a strategic and operating review to determine whether Workiva should focus on becoming a more profitable public company or pursue a sale to a private equity sponsor or strategic buyer. Despite Workiva's strong market position with cloud-based compliance software, recurring revenue, and high gross margins, the company has struggled with negative operating and net margins, impacting shareholder returns. Irenic recommends adopting a "Rule of 40" operating model to better balance revenue growth and profitability. The investor has engaged with Workiva's management and may pursue a proxy battle if their proposals are not accepted. Workiva's stock has declined 22% year-to-date, and Irenic aims to dismantle the company's dual-class share structure to facilitate necessary changes.