Legion Partners has increased its stake in Five9, and sources from Reuters say it is immediately pushing for a board seat and cost-cutting measures.
The investment comes just months after Anson Funds Management also bought a stake in the company and began pressuring it to sell up.
Five9 has so far declined to comment, and the size of Legion’s stake in the company is unclear.
However, in applying such pressure for changes, it is likely a meaningful percentage.
According to Reuters, Legion and Anson first got involved in 2021 when Zoom’s $14.7BN offer to buy Five9 was rejected.
Since then, Five9 has expanded significantly, regularly achieving double-digit year-over-year (YoY) revenue growth.
However, its stock has dropped 60 percent since the start of the year, seemingly inciting among its investors.
In July, Five9 moved to appease them by announcing its first-ever round of layoffs to drive "shareholder value". These impacted seven percent of its workforce.
Mike Burkland, Chairman and CEO of Five9, emailed employees at the time: "Sadly, we have made the very difficult decision to say painful goodbyes to some of our team members.
As you know, we recently announced in our earnings call that we reduced our revenue guidance for 2024 and will focus on improving profitability through managing expenses.
"Looking forward, Five9 is focused on driving shareholder value by increasing revenue, improving profitability, investing in our key strategic initiatives, and delivering for our customers.