Outerwall‘s stock price is up about 8% this morning, the first trading day after the activist investor group disclosed it bought 3.8M shares — about 13.5% of the total — and wants the owner of the Redbox DVD rental kiosks to begin “a review of strategic alternatives” that could include a sale or breakup. Now the company’s largest shareholder, Jana Partners said in an SEC filing that Outerwall’s stock is “undervalued” and it wants management to consider “a strategic transaction, selling or discontinuing certain businesses, or pursuing a sale” of the company to provide “a significant return of capital to shareholders.” Jana also said it wants to talk to management about “other topics including management and board composition, strategy and future plans.” Outerwall — formerly known as Coinstar — has been on the defensive since it disclosed last month that Q3 earnings will fall short of expectations. One problem is that Redbox is “mature, making investment in the company difficult for growth investors,” Wedbush Securities analyst Michael Pachter says. But B. Riley’s Eric Wold says this morning that Jana’s interest in Outerwall could highlight “long-term opportunities that still remain with physical rentals” many of which have been “unrecognized and undervalued by investors.” The company has already said that it will repurchase $200M of its shares this year. That could grow under pressure from Jana. In addition, the investors will pressure Outerwall to distance itself from its Redbox Instant by Verizon joint venture, which has yet to make a splash in the streaming video market, Bloomberg reports citing “a person with knowledge of the matter.”