TXN - What's Going On With Texas Instruments Stock After Activist Elliott Bags $2.5B Stake? | Benzinga
Texas Instruments Incorporated (NASDAQ:TXN) shares are trading slightly higher on Tuesday.
Elliott, renowned for shareholder activism and with assets totaling $65 billion, has invested more than $2.5 billion in Texas Instruments, according to a press release. The investor sent a letter to the Board of Directors of Texas Instruments.
The hedge fund advocates for enhanced free cash flow through a more flexible approach to capital expenditures, CNBC reported.
For 12 months ended March 31, Texas Instruments’ free cash flow totaled $940 million, down 79% year over year. Free cash flow as a percentage of revenue contracted to 5.6% from 22.6% in the year-ago period.
According to a 13-page letter that CNBC reviewed, Elliott suggests Texas Instruments adopt a “dynamic capacity-management strategy.”
This approach could potentially raise free cash flow to over $9 per share by 2026, exceeding current analyst consensus by around 40%.
Elliott contends ...