Investing.com -- Activist hedge fund Findell Capital Management is launching a campaign for sweeping changes at software company Figma Inc (NYSE: FIG), declaring the platform significantly undervalued. In a letter to the board alongside an activist report released Thursday, the firm argued the "Adobe slayer" is being mistakenly penalized by public markets over unfounded artificial intelligence disruption fears.

Figma currently trades at nearly half of the $20 billion valuation Adobe Systems Incorporated (NASDAQ: ADBE) agreed to pay in 2022, despite trailing revenue tracking at three times the level it generated during that original acquisition offer. The activist investor is demanding that management immediately sharpen its product focus and aggressively rationalize operating costs to bring the firm in line with mature software peers.

To unlock shareholder value, Findell is urging Figma to streamline its overextended product organization by trimming its current portfolio from eight offerings down to four core applications. The fund recommends prioritizing Design, Dev Mode, FigJam, and Make, while completely sunsetting or repackaging lesser performing tools like Slides and Sites to eliminate bloated engineering expenses.

The campaign also targets Figma’s outsized corporate spending, highlighting that projected 2026 stock-based compensation consumes an eye-popping 27% of revenues compared to just 8% at Adobe. Findell asserted that narrowing the product focus will allow the company to safely reduce its research and development overhead without compromising its core competitive moat.

Beyond financial metrics, the activist raised serious corporate governance alarms regarding potential conflicts of interest tied to artificial intelligence startup Anthropic. Findell called for an independent board investigation into whether Anthropic improperly utilized Figma’s confidential information prior to launching its competing Claude Design tool in April.

The demands follow the abrupt resignation of Anthropic Chief Product Officer Mike Krieger from Figma’s board just days before Claude Design was released. The firm pointed out that two remaining Figma directors, representing Kleiner Perkins and Sequoia Capital, hold material economic exposure to Anthropic through their respective venture firms.

The proxy pressure comes as Figma stock sits 74.9% below its initial market debut peak, having dropped 27.4% over the past three months alone on these compounding AI anxieties that Findell argues are misplaced since Claude Design targets design tools like Sketch rather than Figma.

Findell’s latest 13F filing on May 15 reported $341.43 million in long equity assets anchored by a $132.17 million position in Liquidia Technologies Inc (NASDAQ: LQDA), but disclosed no current equity holdings in Figma.

Though the firm did not reveal its stake, Findell issued a highly bullish 12-month standalone price target of $40 per share on Figma, implying an 80% upside based on fundamental metrics. Should the board fail to execute on these recommended operational enhancements, the firm outlined a strategic buyout floor of $50 per share from logical suitors like Microsoft or Alphabet.

Figma stock is 1% higher in premarket trade Thursday, buoyed by a JPMorgan analyst initiation at Neutral with a $42/share price target.