Activist Fund Starboard Value Acquires Stake in Autodesk
Activist fund Starboard Value, managed by Jeff Smith, has acquired a significant stake in the graphic design company Autodesk. In recent weeks, discussions have been held with the company’s board regarding issues surrounding the disclosure of information about an internal investigation that led to the resignation of the chief financial officer.
Concerns Over Timing of Disclosure
Sources familiar with the situation estimate Starboard’s stake at around $500 million. The activist fund, known for its experience in the technology sector, is particularly concerned about the timing of Autodesk’s disclosure of information related to the internal investigation. Allegations suggest that management misled investors about the company’s free cash flow metrics and operating margin.
Outcome of Investigation
Following the investigation, Autodesk’s chief financial officer Deborah Clifford was suspended and reassigned to another executive role within the company. It was revealed that management manipulated reports on the company’s account structure by transitioning from annual payments to prepayments to enhance metrics.
In April, Autodesk announced the start of an internal investigation into reporting issues with these metrics, a month after commencing the investigation and notifying the Securities and Exchange Commission. Subsequently, the company’s shares dropped by 20% over the following weeks, with its market capitalization now standing just under $50 billion.
