Activist Elliott takes $2.5 billion stake in Texas Instruments, urges company to improve free cash flow

[mahatmakanejeeves]

Last edited Tue May 28, 2024, 12:48 PM - Edit history (2)

SHAREHOLDER ACTIVISM
Activist Elliott takes $2.5 billion stake in Texas Instruments, urges company to improve free cash flow

PUBLISHED TUE, MAY 28 2024 • 9:05 AM EDT | UPDATED AN HOUR AGO
David Faber
@DAVIDFABER

KEY POINTS
• Elliott, the $65 billion hedge fund best known for its shareholder activism, has made a $2.5 billion investment in Texas Instruments.
• The activist is urging Texas Instruments to improve its free cash flow by adapting a less rigid plan for capital expenditures.
• Elliott believes Texas Instrument’s rigid adherence to a capital expenditure plan put in place in 2022 has eviscerated shareholder returns.

Elliott, the $65 billion hedge fund best known for its shareholder activism, has made a $2.5 billion investment in Texas Instruments
and is urging the company to improve its free cash flow by adapting a less rigid plan for capital expenditures.

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Edited to add:

Elliott Investment Management

Company type: Private
Industry: Investment management
Founded: 1977; 47 years ago in New York City
Founder: Paul Singer
Headquarters: West Palm Beach, Florida, U.S.
Key people: Paul Singer (co-CEO), Jonathan Pollock (co-CEO)
Website: elliottmgmt.com

Elliott Investment Management L.P. is an American investment management firm. It is also one of the largest activist funds in the world.

It is the management affiliate of American hedge funds Elliott Associates L.P. and Elliott International Limited. The Elliott Corporation was founded by Paul Singer, who is CEO of the management company, based in New York City. As of the first quarter of 2015, Elliott's portfolio is worth over $8 billion.

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Investments

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Johnson Controls Inc.

In May of 2024, Elliott Advisors announced that it is a large investor in Johnson Controls valued at approximately $1 billion.

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[Deep State Witch]

1. They're Still Around?

I thought that TI went out of business decades ago!

[WA-03 Democrat]

2. Not at all

From an electronic component supplier they are everywhere. 500 lbs Gorilla in linear, logic, descrict, MEMs, etc, etc.
Out of all the semiconductor companies they added more production capacity faster and very accurate when they would catch up to market demand.

[Voltaire2]

3. Elliot is the absolute shit.

Once they get a foot in the door, your company is fucked. They will double deal into a PE buyout followed by the usual bust out of assets. It's sweet if you are one of their corporate officers/agents of doom, otherwise its just going to be bad.

[DFW]

4. Normally I don't care about games like that, but this is an exception.

I let some people talk me into buying some stock about 25 years ago. Normally I don't even bother looking at it, but TI is different. I bought 1000 shares of TI when it was $54 a share, and it has split 3 times, 2 for one, since then. Those 1000 shares of 1998 are now 8000 shares. So, that $54,000 investment of yore now represents a huge chunk of my expected retirement money, even after taxes on the gain, which, at this point, is just about all of the value. If it is due for a big fall soon, I would be greatly affected (by my modest standards, anyway). I was wondering why it had gained a third in value so quickly recently. This would explain that. However, if it is due for a crash in the near future, I should head for greener pastures before that happens.

My "portfolio," if it is even worth being called that, is parked with a mostly Republican outfit (Texas, don't forget), who I ordered to never touch my stuff or give me advice again. They are ones who talked me into selling my 500 shares of Apple (grew to 2000 shares due to splits, just like TI) at $189. It then went to $700, split 7 for one, etc etc. In short, they screwed me out of a $2 million gain with their expert "advice," which I told them was no longer needed or wanted. I think I will ask them about TI. If they tell me to hold, it is probably time to ditch it, pay the taxes and buy gold, or something equally useless, but immune to such games.