Icahn says board nominees to help keep Illumina from ‘sinking further’

Carl Icahn released an open letter to shareholders of Illumina: "Based on his recent press tour, which saw him attempting – desperately, hilariously and, most of all, unsuccessfully – to spin the company’s recently released, and decidedly mediocre, quarterly results, Illumina CEO Francis deSouza seems to believe that he can fool all of the people all of the time. But the market steadfastly refuses to be fooled for long by charlatans. The more Mr. deSouza spoke, the lower Illumina’s shares traded, clearly signaling dissatisfaction with the earnings report and dissatisfaction with Mr. deSouza’s transparent attempt to put lipstick on a pig. To combat lower revenues and dwindling margins, Illumina announced a series of vague cost cutting plans, with the promise of attaining "Core Illumina" adjusted operating margins of 25% in 2024 and 27% in 2025 – as if achieving those less than modest goals would be a success! Describing this underwhelming "plan," Mr. deSouza stated: "We’re looking at increasing our operating margins. Historically, we’ve operated in the range of 25-30% in terms of our operating margins. And this year we’re at 22%…and so what we’re committing to is bringing us back to 25% operating margins next year and then 27% the year after." Listening to Mr. deSouza talk about the very disappointing quarterly results and his extraordinarily unambitious plan to limp back to extremely middling margin targets (which will take years to realize, if they are achieved at all), those not skilled in deciphering doublespeak might actually get the impression that Illumina was doing well! "We’re really excited about the way the year is starting," gushed Mr. deSouza, adding: "On the one hand, we’re seeing very strong demand…and on the other hand, we’ve seen our manufacturing ramp really nicely…so really our operations have done really well"… Additionally, we read an interesting piece recently on Illumina, entitled "Malignant Governance," which asks the question that has been on the mind of virtually every long term shareholder with whom we have spoken: "How much money did Illumina insiders (past and present) make from splitting-off and subsequently re-acquiring Grail?" We have no idea if the allegations are true. However, based on what we do know of the past actions and lack of transparency exhibited by Illumina CEO Francis deSouza and the incumbent directors, we would not be surprised at all if some or all of the assertions turned out to be accurate. We therefore implore the board to bring in an outside – and demonstrably independent – law firm and forensic accounting team to investigate and address these questions publicly, with enough time prior to the upcoming annual meeting to allow shareholders to take the results into account when casting their votes for directors. We believe that an unbiased investigation into these murky issues is necessary and appropriate, given the fact that the director election will in effect be a referendum on the entire GRAIL fiasco. Unfortunately, we believe that we will see pigs fly before we see such an investigation conducted by this board.We feel strongly that our three highly qualified nominees are particularly suited because of their experience (and particularly because of their status as completely independent of CEO Francis deSouza) to help keep Illumina from sinking further into the quicksand. We look forward to meeting with you over the coming weeks. Thank you for your continued support."