What happened
Clarus Corp. (CLAR -3.32%) shareholders beat the market in early trading on Thursday. The outdoor equipment maker's stock was up 7% by 11:15 a.m. ET, compared to a 1% decline in the S&P 500. The rally didn't do much to erase recent losses, though, and shares remain down by about 40% so far in 2022.
This rally may have been sparked by a statement by the management team indicating that Clarus is prepared to fight off a recent move by an activist investor to acquire more of its shares.
So what
Clarus acknowledged in a Thursday morning statement that its shares had become extremely volatile in recent weeks. Management said they aren't aware of anything related to the business that could be causing these swings, but instead suggested that news that Parallax Volatility Advisers has accumulated more than 5% of its outstanding shares could be to blame.
These purchases violate the company's internal shareholder rights agreement, which requires approval by the board of directors before a shareholder can boost their ownership level above 5%.
Clarus says it is prepared to take action against the move, including by diluting the value of Parallax's holdings. The company is also raising the issue of its volatile stock price with the Nasdaq index in hopes of catching any issues of price manipulation.
Now what
These updates don't have any bearing on the company's operating trends, which have been positive. Sales are on pace to rise by 35% this year to nearly $500 million. The company remains profitable, too.
Continued success on these metrics is the surest path toward impressive long-term returns for shareholders, but they will also be happy to see more stability in the stock price. Reducing that volatility is clearly a priority of the management team today, so it is no surprise to see the growth stock's rise on Thursday.
