| Starboard Asks TriQuint to Make Changes to Mobile Power Amplifier Unit -- Update | (Adds TriQuint response and updates share performance.)
By Ben Fox Rubin
Activist investor Starboard Value LP called on TriQuint Semiconductor Inc. (TQNT) to make changes or consider selling its mobile power amplifier business, claiming the division is a drag on the chip maker.
Starboard, which owns about 8% of the company's stock, said TriQuint has two "strong, growing and highly profitable" segments--the networks and defense unit and bulk acoustic wave filter business--adding those two units alone are worth more than where the company currently trades.
The investor argued those businesses, though, have been overshadowed by the mobile PA business, where "significant utilization issues and missed design cycles have led to large losses and significantly reduced consolidated gross margins."
Starboard asked TriQuint whether it could restructure the mobile PA business so it can operate more profitably or if it should seek to sell its mobile PA business and focus on the other two businesses.
TriQuint, for its part, said it "welcomes constructive input from all shareholders, including Starboard Value LP." The company said it regularly reviews its strategy and has taken "meaningful steps" increase value for its shareholders.
The company's mobile-device business faces intense competition in the sector. On Tuesday, the company reiterated that it has invested in premium filters, among other complementary products. Though the investments presented financial headwinds for the company in the last year and half, TriQuint has said these investments have positioned the company ahead of its competition.
Earlier this month, the company said it swung to a third-quarter profit as it posted improving revenue.
Shares closed Tuesday up 5.7% at $7.76. The stock is up 61% so far this year.
-Michael Calia contributed to this article. |
