By Elsa Ohlen

Activist investor Starboard Value has a new target in sight: Design-software company Autodesk.

Starboard's track record as well as Autodesk's ongoing efforts to turn the company around could mean that shares will see some upside in the near future.

The activist intends to nominate a minority slate of board candidates in time for Autodesk's upcoming annual meeting as it believes it is underperforming peers, The Wall Street Journal reported late Tuesday, citing people familiar with the matter.

Starboard has amassed a $500 million stake in the company, The Journal reported in June. Autodesk has a market capitalization of about $55 billion.

Autodesk stock rose modestly on the media report, up 0.7% to $261.83 in premarket trading Wednesday. Futures tracking the benchmark S&P 500 were up about 0.1%.

Shares of the software firm are up 1.5% over the past 12 months, compared with S&P 500's 8.4% gain, according to FactSet data.

In February, the company reported fourth-quarter results above expectations and announced job cuts as part of a wider restructuring plan. Still, the stock fell almost 3% in the following trading session as investors seemed to instead focus on the pulled revenue growth targets.

The stock took a dive last year when Autodesk delayed filing its annual financial accounts and said it had opened an investigation into its accounting practices, but it didn't result in any adjustments to its financials.

Starboard is of the opinion that Autodesk hasn't sufficiently held anyone accountable for the issues around accounting, or the general performance lately, according to the people familiar with the matter.

The activist investor, led by Jeff Smith, has a track record of bringing about change and value in the companies it targets.

"[Starboard] probably has one of the strongest track records in the history of shareholder activism," said Patrick Gadson, partner at Vinson & Elkins who specializes in shareholder activism, speaking to Barron's late last year.

"It's one of the few names that sparks the most anxiety...in boardrooms, and that is because of the success that they had and their willingness to be very granular in their analysis -- but also very pointed in their public critiques and their willingness to be very public."

"It's definitely one of the boogeymen in shareholder activism."

Autodesk didn't immediately respond to a request for comment.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

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March 19, 2025 07:10 ET (11:10 GMT)

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