Activist investor Elliott Management targets Texas Instruments: 'Investors are concerned' – Tech Xplore
Click here to sign in with or
Forget Password?
Learn more
share this!
4
Twit
Share
Email
May 29, 2024
This article has been reviewed according to Science X’s editorial process and policies. Editors have highlighted the following attributes while ensuring the content’s credibility:
fact-checked
reputable news agency
proofread
by Andrew Long, The Dallas Morning News
Activist investor Elliott Management has taken a $2.5 billion stake in Dallas-based semiconductor giant Texas Instruments, blaming the company for lagging stock market returns and overspending.
In the letter to TI’s board, Elliott said the company is spending too much on massive capital projects and that ” commitment to capital discipline will restore investors’ confidence.”
Elliott’s investment is worth about 1.3% of the company’s market value.
“TI’s shareholder returns have lagged peers consistently over a multi-year period, despite TI’s reputation as one of the best-managed semiconductor companies with strong growth prospects and competitive advantages,” Elliott wrote. “Our diagnosis is simple: Investors are concerned that TI appears to have deviated from its longstanding commitment to drive growth of free cash flow per share.”
TI, known to many consumers for its handheld calculators, is one of the world’s most prominent semiconductor manufacturers, a vital ingredient in many electronic devices. The company’s growth has coincided with an effort to centralize production on American soil, highlighted by the company’s November 2021 announcement of a $30 billion complex in Sherman with four semiconductor fabrication plants that will add 3,000 manufacturing jobs in the North Texas area.
The company also maintains a fabrication plant in Dallas, as well as two in Richardson and two in Lehi, Utah.
Elliott, which holds more than $65.5 billion in various companies, voiced concerns in its letter to the TI board about the scale and frequency of such outlays. It believes that Texas Instruments is investing in an industrial capacity that exceeds the expected demand for its products.
Elliott is known for high-profile activist investor campaigns involving companies such as Dallas-based AT&T, Twitter, Barnes & Noble and Comcast.
“While there are multiple contributing factors to TI’s underperformance,” the letter reads, “we believe the most significant has been the dramatic increase in capital investment announced in 2022, which has led to a fundamental deviation from TI’s long-held commitment to driving growth in free cash flow per share.”
The focus on long-term developments comes at the expense of share value, the letter says, and it is vital that TI refocuses itself toward a more “dynamic” strategy “in a manner consistent with its historical practices.”
A representative from Texas Instruments did not respond to a request for comment.
2024 The Dallas Morning News. Distributed by Tribune Content Agency, LLC.
Explore further
Facebook
Twitter
Email
Feedback to editors
22 hours ago
0
Jun 2, 2024
0
Jun 1, 2024
0
May 31, 2024
0
May 31, 2024
0
3 hours ago
3 hours ago
16 hours ago
19 hours ago
21 hours ago
22 hours ago
22 hours ago
23 hours ago
Jun 3, 2024
Jun 2, 2024
Feb 16, 2023
Nov 17, 2021
Feb 4, 2022
Jan 22, 2019
Mar 1, 2019
Sep 9, 2019
May 31, 2024
May 23, 2024
May 16, 2024
May 14, 2024
Apr 24, 2024
Apr 24, 2024
Use this form if you have come across a typo, inaccuracy or would like to send an edit request for the content on this page. For general inquiries, please use our contact form. For general feedback, use the public comments section below (please adhere to guidelines).
Please select the most appropriate category to facilitate processing of your request
Thank you for taking time to provide your feedback to the editors.
Your feedback is important to us. However, we do not guarantee individual replies due to the high volume of messages.
Your email address is used only to let the recipient know who sent the email. Neither your address nor the recipient’s address will be used for any other purpose. The information you enter will appear in your e-mail message and is not retained by Tech Xplore in any form.
Daily science news on research developments and the latest scientific innovations
Medical research advances and health news
The most comprehensive sci-tech news coverage on the web
This site uses cookies to assist with navigation, analyse your use of our services, collect data for ads personalisation and provide content from third parties. By using our site, you acknowledge that you have read and understand our Privacy Policy and Terms of Use.