Activist investor Elliott Management has taken revealed a $2.5 billion stake in Dallas-based semiconductor giant Texas Instruments, blaming the company for...
Elliott revealed a $2.5 billion stake in the semiconductor manufacturer and dissatisfaction with its 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., Elliott said the company is spending too much on massive capital projects and that “ commitment to capital discipline will restore investors’ confidence.
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 aThe 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 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.
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