Elliott takes multibillion dollar stake in Synopsys - report

(Sharecast News) - Synopsys shares shot higher on Monday following a report that activist investor Elliott Investment Management has made a multibillion-dollar investment in the big chip-design software maker. According to the Wall Street Journal, citing people familiar with the matter, Elliott plans to engage with Synopsys to push the business to make more money from its software and services. Synopsys' customers include Intel, Alphabet and Tesla.

California-based Synopsys has a market value of over $80bn. The company's software and services are used to design electronic components for modern chips and help semiconductor, technology and artificial-intelligence companies ensure their hardware will work as intended.

"Synopsys is essential to the global chip industry," Elliott Managing Partner Jesse Cohn told the WSJ. "As AI drives a step change in chip complexity and capital investment, Synopsys is uniquely positioned to benefit from this growth."

Cohn said Elliott believes there is a "clear opportunity for Synopsys' financial performance to more fully reflect the value it delivers". Cohn said the firm looks forward to engaging with the company, "to help align operational execution, profitability and monetisation with its potential and importance to the semiconductor ecosystem".

Other details around Elliott's position couldn't be learned, the WSJ said. The activist often seeks operational and governance improvements.

Commenting on Elliott's stake, Synopys told the WSJ that it regularly engages with its shareholders and values their input. It said that following its $35bn deal in 2024 to acquire Ansys, "our opportunity and our product road map have never been stronger".

At 1540 GMT, the shares were up 4% at $437.06.