Elliott secures Synopsys board seat

The activist hopes to reverse lagging stock performance after Synopsys raises outlook.

Activist investor Elliott Investment Management has won a board seat in a settlement with U.S. software company Synopsys.

According to a Wednesday regulatory filing, Synopsys will expand its board from 10 to 11 directors, with Elliott Managing Partner Jesse Cohn joining the team. Cohn will also take a seat on the company’s corporate governance and nominating committee.

In exchange, the activist agreed to customary standstill and mutual non-disparagement provisions, including that it would not acquire more than a 4.9% stake in the company.

Synopsys, which has a market cap of around $100 billion, designs and engineers semiconductors, a crucial component to tech giants like Apple, Nvidia, AMD, and Qualcomm.

As chips have become more advanced, especially for AI and data centres, the importance of these electronic design automation tools has increased significantly.

After building its position in Synopsys earlier this year, Elliott reportedly engaged with management and the board on ways to improve profitability and execution metrics in order to close the distance on competitor Cadence.

While the company’s product is certainly in high demand, its shares have lagged the VanEck Semiconductor index. For example, the index’s price has risen 520.62% since ChatGPT was formed in November 2022, while Synopsys’ stock has only risen 61.59%.

Cohn will officially join the board on June 1. He serves on Elliott’s investment committee and boasts experience on a number of significant board roles including positions at Twitter, Citrix, eBay, and athenahealth.

The news comes alongside Synopsys’ Wednesday decision to raise its annual results forecast, signaling steady demand. The company is targeting between $9.63 billion and $9.71 billion of revenue in fiscal 2026, up from its previous range of $9.56 billion to $9.66 billion.

The company expects annual adjusted profit to lie between $14.72 and $14.80 per share, above analyst estimates of $14.45 per share.

Shares in Synopsys closed at $480.65 on Thursday, down 8.61% from the day before. The stock is down 7.77% year-to-date.

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