Autodesk Stock Junps After Starboard Value Reportedly Pushes for Change

Shares of Autodesk (ADSK) are jumping 4% in premarket trading Monday after The Wall Street Journal reported that activist investor Starboard Value had taken a stake of roughly $500 million in the engineering design software company and is pushing for changes.

Citing people familiar to the matter, the Journal reported late Sunday that Starboard recently met with Autodesk executives to discuss concerns about the company’s operations, corporate governance, and a recent accounting probe. The activist investor thinks the software maker should improve its margins and shake up its board, the sources added.

Autodesk’s stock price has come under pressure this year after the company announced in April that it had delayed releasing its annual report due to an investigation into its accounting practices relating to its cash flow and operating margins. Last month, the company provided an update, saying the probe found no material issues and that adjustments to its financial statements weren’t required.

However, Starboard criticized Autodesk in the recent meetings for failing to disclose the internal investigation until after the window to nominate new board members had closed in March, the report said, adding that the activist investor is considering legal action to reopen the nomination window and to delay Autodesk’s annual shareholders meeting slated for July 16.

Monitor These Key Chart Levels in Autodesk Stock

Taking a look at the weekly chart, Autodesk shares have oscillated within an ascending channel since mid-March 2022 despite the 50-day moving average (MA) remaining below the 200-day MA for most of that time, a technical signal typically indicating a downtrend. More recently, the price broke down below the channel’s lower trendline but promptly reversed to close back within the pattern, potentially creating a bear trap. Given the mixed signals on the chart, investors should be prepared for a move in either direction.

If the stock climbs higher, it’s worth keeping an eye on the $280 level, an area where the price may run into selling pressure near the channel’s upper trendline. On the downside, a close beneath last month’s low at $195.32 could lead to a retest of the $175 region that finds longer-term support from a trendline roughly connecting the July 2019 swing high and June 2022 swing low.

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As of the date this article was written, the author does not own any of the above securities.