Shares of Cornerstone OnDemand (NASDAQ:CSOD) soared on Thursday, closing out the day with gains of 15%, after news broke that the company has reportedly hired financial advisors for a "strategic review." That's a euphemism for the company trying to sell itself.
Bloomberg first broke the news, citing an anonymous source. Cornerstone has reportedly tapped Centerview Partners and Goldman Sachs to explore possible bids from suitors while trying to appease activist investor Praesidium Investment Management, which disclosed a 6% stake (3.3 million shares) back in February 2016. Reuters corroborated the rumor.
Rumors of Cornerstone trying to sell itself first emerged in December 2016. Those initial reports similarly cited Praesidium as a driving force, but at that time the company had not yet retained financial advisors to explore possible bids.
The fact that Cornerstone, which provides human capital management software to enterprise customers using a software-as-a-service (SaaS) model, has now hired financial advisors could signal that it's taking a sale more seriously. It's still too early to say if a bid or sale will actually materialize, or how much suitors may be willing to pay, but it's a step in the right direction for investors.