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Starboard Value, which has accumulated a $500M stake in Autodesk (NASDAQ:ADSK), continues to call out issues it has with the current Board of Directors of the design software company.
“We are writing to you today to highlight shareholders’ disappointment and dissatisfaction with Autodesk’s wholly inadequate response to the serious disclosure and governance issues that were recently disclosed as part of the findings of the Company’s Audit Committee Investigation, which came after years of subpar operational and financial performance,” Starboard said in a letter to the Autodesk board of directors dated Tuesday, June 25.
“Furthermore, we are concerned the Company is perpetuating a misleading narrative that ‘all is well’ at Autodesk in order to maintain the status quo,” they added.
Starboard has called for a refresh of the company’s board of directors and filed a lawsuit in the Delaware Court of Chancery to delay Autodesk’s 2024 Annual Meeting on July 16. However, a judge denied this request last week.
“As we have previously written, we believe Autodesk can significantly improve its combination of growth and profitability through substantial margin improvement,” Starboard wrote. “Autodesk generates best-in-class gross margins, but despite this enviable starting point, the Company’s adjusted operating margins are subpar because the Company outspends its peers on operating expenses.”
“By executing upon a margin improvement plan, we believe Autodesk can begin to rebuild investor confidence, which has cratered as the Company has continually missed its commitments (and is expected to continue doing so),” the investment adviser added.
Autodesk ticked up 1% during Tuesday morning trading.