Activist Demands Steps At Silicon Image

Silicon Image Inc.'s SIMG 5.2 percent shareholder Engaged Capital demanded immediate action to boost its share price in a letter to SIlicon's board Monday.

The Sunnyvale, Calif. supplier of semiconductors for the mobile and personal computer markets gained about 1 percent on Monday, trading at $5.25 a share.

The activist investor, which recently boosted its stake in Silicon Image, said the company's shares are trading at least 50 percent below their value "even in a worst case scenario."

Silicon Image plunged more than 25 percent last week after it warned investors to expect a 10 percent decline in 2015 revenue because of less business from a major customer it didn't identify. In the year to date, its shares are off more than 14 percent.

Engaged said the value of Silicon Image's high-definition multimedia Interface business is "obscured by company's complex business structure," while Silicon's earnings would rise 65 percent by "excluding" its 60 GHz wireless assets.

Silicon recently said it will form two new units, one for its 60 GHz wireless assets and another for its service business.

Engaged also urged the company to "aggressively repurchase shares" while making major cuts to its "bloated cost structure."

Engaged will consider nominating new directors if the company fails to boost its share price, according to a letter signed by Engaged's managing member Glenn W. Welling.