Autodesk(US:ADSK) CNBCยท2024-06-17 01:42Core Viewpoint - Starboard Value has acquired a significant stake in Autodesk, valued at approximately $500 million, and has raised concerns regarding the company's internal investigation and disclosures related to misleading financial metrics [1][2]. Group 1: Stake Acquisition and Concerns - Starboard Value, led by Jeff Smith, has taken a sizable stake in Autodesk, valued at around $500 million [1]. - The activist fund is particularly worried about the timing of Autodesk's disclosure regarding an internal investigation that revealed misleading information about free cash flow metrics and operating margins [1][2]. Group 2: Internal Investigation and CFO Ouster - The internal investigation resulted in the ousting of Autodesk's CFO, Deborah Clifford, who was reassigned to another executive role [2]. - The investigation found that executives manipulated reporting related to the company's contract billing structure, shifting from annualized payments to upfront payments to enhance financial metrics [2]. Group 3: Disclosure Timing and Legal Action - Autodesk disclosed the internal investigation in April, nearly a month after it began, which led to a 20% decline in its share price [2]. - The timing of the disclosure raised concerns for Starboard, as it occurred shortly after the deadline for director nominations, potentially limiting shareholder actions [3]. - Starboard is considering legal action in Delaware Chancery court to reopen Autodesk's nominating window and delay the annual meeting scheduled for July 16 [3]. Group 4: Potential for Improvement - Starboard believes that Autodesk can achieve actual margin improvements and enhance investor communications to support its stock price [3]. Group 5: Previous Activist Engagements - Autodesk has previously faced activist scrutiny, settling with two activist investors in 2016 to avoid a proxy contest [4]. - The company is currently under investigation by the Justice Department and SEC [4].