Autodesk Stock Jumps As Activist Investor Pushes For Margin Improvement, Board Changes: The Details

Autodesk Inc ADSK shares are trading higher Monday after activist investor Starboard Value purchased a stake of more than $500 million in the company and wrote a letter to shareholders pushing for changes.

What Happened: Activist investor Starboard is pushing Autodesk to improve margins and make some changes to its board. In a letter released on Monday, Starboard urged shareholders to consider opportunities for improved corporate governance and enhanced value creation.

“We believe Autodesk has continued runway for growth, with incredibly sticky solutions that are the industry standard and integral to how its customers work, as well as an opportunity to expand further into attractive new verticals, such as construction,” the activist investor said in the letter.

“We also believe Autodesk has an opportunity to create significant shareholder value by meaningfully improving its combination of growth and profitability through substantial margin improvement, as well as adopting more shareholder-friendly capital allocation policies and improving governance and oversight.”

Starboard said it attempted to engage privately with Autodesk in recent weeks and offered to either work with the company on a board refresh or reopen the nomination window to allow shareholders to make a fully informed decision, but Autodesk chose not to pursue either of those paths forward.

As a result, Starboard filed a lawsuit asking the Delaware Court of Chancery to reopen the nomination window for the company’s board so that shareholders will have the opportunity to make an informed decision.

“While we have unfortunately been forced to take legal action in an attempt to protect shareholders' rights, our primary goal remains to help create long-term value for the benefit of all Autodesk shareholders,” Starboard said.

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ADSK Price Action: Autodesk shares were up 4.48% at $236 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Autodesk.