Activist Investor Elliott Discloses $2.5 Billion Stake in Texas Instruments
By Dean Seal
Activist investor Elliott Investment Management has taken a $2.5 billion stake in Texas Instruments and is pushing the chip maker to improve its free cash flow generation.
The firm sent a letter to Texas Instruments' board on Tuesday disclosing the significant stake and criticizing the underperformance of the company's stock relative to its peers.
Elliott said that ever since Texas Instruments launched a substantial ramp-up in capacity in 2022, its free cash flow has declined by more than 75%, and shareholders have been given limited visibility or guidance on when free cash flow per share will return to its historical norm.
The company is also building capacity far in excess of expected demand, the firm said. Texas Instruments has targeted revenue capacity of $30 billion in 2026, which represents 50% excess capacity above the current consensus revenue expectations, Elliott said.
The investment firm is calling on Texas Instruments to adopt a dynamic capacity-management strategy and set a per-share free cash flow target of at least $9 for 2026, which would be 40% higher than current investor expectations.
Texas Instruments shares touched an all-time high of $206 in early trading on Tuesday.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
May 28, 2024 10:17 ET (14:17 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.-
September Jobs Report Forecasts Show Moderate Hiring Gains
-
Port Strike a Headache for Shippers but a Potential Tailwind for Certain US Transport Stocks
-
13 Charts on Q3′s Roller-Coaster Rally for Stocks and Bonds
-
5 Stocks to Buy Instead of Overpriced US Equities
-
Q4 Stock Market Outlook: Where We See Opportunities for Investors
-
Markets Brief: Non-Farm Payrolls in the Spotlight Again
-
6 Top-Performing Large-Growth Funds
-
What’s the Difference Between the CPI and PCE Indexes?
-
10 Top-Performing Dividend Stocks of Q3 2024
-
33 Undervalued Stocks
-
Communication Services: Cable’s Broadband Dominance Isn’t as Strong as It Once Was
-
Technology: Strength Continues, With Software Presenting the Best Buying Opportunities
-
Best- and Worst-Performing Stocks of Q3 2024
-
Top Stocks to Own From the Best Fund Managers
-
2 Cheap Stocks Top Managers Have Been Buying
-
The 10 Best Companies to Invest in Now