What's Going On With Texas Instruments Stock After Activist Elliott Bags $2.5B Stake?
Portfolio Pulse from Nabaparna Bhattacharya
Elliott Management has acquired a $2.5 billion stake in Texas Instruments (NASDAQ: TXN) and is advocating for a more flexible capital expenditure approach to enhance free cash flow. Elliott's letter to the Board of Directors suggests that Texas Instruments' current Capex plan has significantly reduced free cash flow and shareholder returns. The hedge fund believes that adopting a dynamic capacity-management strategy could increase free cash flow to over $9 per share by 2026, exceeding current analyst consensus by around 40%.
May 28, 2024 | 3:07 pm
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Elliott Management's $2.5 billion investment in Texas Instruments and its push for a more flexible Capex approach could significantly impact the company's free cash flow and shareholder returns. The hedge fund's strategy aims to increase free cash flow to over $9 per share by 2026, which is 40% above current analyst expectations.
Elliott Management's significant investment and strategic recommendations are likely to influence Texas Instruments' financial policies and investor sentiment positively. The potential for a substantial increase in free cash flow per share by 2026 could drive the stock price higher in the short term.
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