Activist Elliott wants Texas Instruments to bolster free cash flow. An amicable solution may emerge
Publishing timestamp: 2024-06-01 08:52:59
Summary
Elliott, an activist investor, has taken a $2.5 billion position in Texas Instruments and is calling on the company to adopt a dynamic capacity-management strategy and introduce a free cash flow per share target of $9.00+ in 2026. Elliott believes that Texas Instruments' aggressive capex plan has decimated free cash flow per share and is building to 50% excess capacity. They recommend a decrease in 2026 capex to restore free cash flow per share growth while still building to 30% or 39% excess capacity. Elliott's plan aims to create short-term value without sacrificing long-term opportunities or value.
Sentiment: MIXED
Tickers: TXN,
Keywords: hedge funds, texas instruments inc, business news,