13D Weekly Report - Feb 19, 2024 to Feb 23, 2024
$EAF, $SBOW, $ALIT, $CCI, $FOSL, $M, $NKLA, $NSC, $NVRO, $HLTH, $SBUX, $SCOR
Table of Contents
Nilesh Undavia Discloses his Views on GrafTech International (EAF)
Starboard nominated Board candidates to Alight Inc (ALIT)
Buxton Helmsley Nominates Four Directors to Fossil Group (FOSL) Board
Ancora Alternatives Announces Slate of Director Candidates for Norfolk Southern Corporation (NSC)
Nevro Corp (NVRO) entered into a Cooperation Agreement with Engaged Capital
Tarsadia Investments and Twelve Holdings reach agreement with Cue health, Inc (HLTH)
The Strategic Organizing Center nominated Board candidates to Starbucks Corporation (SBUX)
INITIATED
Nilesh Undavia Discloses his Views on GrafTech International (EAF)
Key Summary: Nilesh Undavia sought collaboration with Board for new CEO, requested one seat, but faced rejection. Despite efforts, Board ignored him. Identified Board errors, sought two nominees for governance fix. Threatened "denial of quorum" for change.Market Cap: $365 million | GrafTech International Ltd. research, develops, manufactures, and sells graphite and carbon-based solutions worldwide.
On February 23, 2024, Nilesh Undavia, an investor (5.7%) with extensive experience in cyclical industries, invested significantly in the company's stock based on thorough research indicating its strong market position. Mr. Undavia initially approached the incumbent Board with a humble and collaborative demeanor, aiming to work together in selecting a new CEO. Seeking to represent all shareholders' interests, he requested only one Board seat. However, the incumbent Board rejected this request, indicating potential entrenchment and prioritization of their own interests over shareholders'. Despite further attempts at engagement, Undavia's efforts for constructive dialogue were largely rebuffed or overlooked by the Board. Despite attempts at collaboration, he found serious errors by the incumbent Board and sought to nominate two candidates to address governance issues. If denied, he might have resorted to a "denial of quorum" campaign, aiming to prompt change for shareholder benefit. Source
Kimmeridge Energy Management Company stated its intention to nominate Board candidates to SilverBow Resources (SBOW)
Key Summary: In Sep 2023, Riposte Capital (5.5%) criticizes Board & Management for aggressive growth and discounted stock sale. In Nov 2023, discontent over dilutive acquisitions, calls for Board changes. On February 16, 2024, Kimmeridge Energy Management Company stated its intention to nominate Board candidates.Market Cap: $713 million | SilverBow Resources, Inc., an oil and gas company, engages in exploration, development, acquisition, and operation of oil and natural gas properties in the Eagle Ford shale and Austin Chalk located in South Texas.
On February 16, 2024, Kimmeridge Energy Management Company (12.9%) stated its intention to nominate three individuals–Douglas E. Brooks, Carrie M. Fox and Katherine L. Minyard for election to the Board and to present a proposal to remove current director Christopher O. Majeske from the Board, each in connection with the 2024 AGM. Source
Past
On September 28, 2023, Riposte Capital (5.5%) stated that they maintain their belief that the Board and Management are making decisions detrimental to the company and its shareholders. They criticized the company's aggressive growth strategy, exemplified by a recent stock sale at a significant discount. They noted that while most similar companies focus on metrics like free cash flow per share and share buybacks, the company is issuing equity at a lower valuation compared to peers. Riposte Capital accused the Board and Management of prioritizing self-interest over shareholder value. They called for specific actions, including the removal of a criticized poison pill, a shift towards profitability, changes in management incentives, and an independent review of strategic options, potentially including a sale of the company. Source
On November 30, 2023, Riposte Capital (6.7%) sent a letter to the Board expressing dissatisfaction with the Board's performance and highlighting that they previously advised the Board to avoid dilutive acquisitions due to the company's scale and financial profile. However, the Board proceeded with a $700 million acquisition of Chesapeake's South Texas position, which they believe eroded shareholder value. They also criticized the issuance of fresh equity at a 12% discount to an already undervalued share price. The letter concluded with Riposte Capital asserting that a significant change in the Board's composition is needed at the 2024 AGM, suggesting the nomination and election of three new independent candidates to better serve the company's interests.
Starboard nominated Board candidates to Alight Inc (ALIT)
Key Summary: On Feb 16, 2024, Starboard nominated Board candidates to Alight IncMarket Cap: $5 billion | Alight, Inc. provides cloud-based integrated digital human capital and business solutions worldwide.
On February 16, 2024, Starboard (7.8%) delivered a letter to the company nominating a slate of director candidates, including Keith D. Dorsey, Matthew C. Levin, Gavin T. Molinelli and Coretha Rushing, for election to the Board at the 2024 AGM. Source
Crown Castle Inc. (CCI) Founder Ted B. Miller Leads Slate of Four Highly Qualified Directors for Board of Crown Castle Inc.
Key Summary: On Feb 20, 2024, Ted Miller, Crown Castle co-founder, suggested the company could have sold its fiber assets for up to $15B if he and his partners joined the board. Crown Castle sought a new CEO after Jay Brown's departure.Market Cap: $47 billion | Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 90,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market.
On February 20, 2024, Ted Miller, co-founder of Crown Castle (CCI.N), and President of Boots Capital Management, stated that the company could sell its fiber assets for up to $15 billion if he and his partners joined its board. He estimated that his plan supports 2026 Ebitda that takes Crown Castle shares to $150 to $160. Miller believed they were best positioned to find buyers and help Crown Castle upgrade its tower assets. He had nominated himself as executive chairman and adding three partners to the board. Miller had asserted that Crown Castle could benefit from his expertise in selling the fiber business, reducing debt, and improving operational efficiency. He criticized Crown Castle's leadership and its pact with Elliott Investment Management, urging for shareholder voting on the agreement. Crown Castle was currently seeking a new CEO after the departure of Jay Brown. Source
Buxton Helmsley Nominates Four Directors to Fossil Group (FOSL) Board
Key Summary: On Feb 20, 2024, Buxton Helmsley Group planned to nominate 4 directors to Fossil's Board, criticizing leadership for stock decline and strategic errors, proposing expertise to restore trust.Market Cap: $55 million | Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally.
On February 20, 2024, the Buxton Helmsley Group (1.4%) announced its intention to nominate four directors to Fossil's Board, citing concerns about the company's declining stock price and management's strategic missteps. BHG criticized Fossil's leadership for failing to create shareholder value and proposed candidates with relevant expertise to restore credibility and improve investor trust. Source
Arkhouse Nominates Nine Highly Qualified, Independent Candidates for Election to Macy’s (M) Board of Directors
Key Summary: On Feb 20, 2024, Arkhouse Management (4.4%) nominated nine candidates for election to the Board at the 2024 AGMMarket Cap: $5.2 billion | Macy's, Inc., an omni-channel retail organization, operates stores, websites, and mobile applications in the United States.
On February 20, 2024, Arkhouse Management (4.4%) nominated nine candidates for election to the Board at the 2024 AGM after failed acquisition attempts, citing the Board's reluctance to engage. Arkhouse emphasized its financing credibility and proposed a higher purchase price, urging the Board to reconsider. Source
Concerned Stockholders of Nikola Corp. (NKLA) Introduce Slate of Independent Director Candidates for Election to the Company’s Board at the 2024 Annual Meeting
Key Summary: On Feb 20, 2024, M&M Residual, LLC, and others (4.5% ownership) nominated five directors to Nikola's Board, aiming to address leadership concerns and improve company performance.Market Cap: $816 million | Nikola Corporation operates as a technology innovator and integrator that develops energy and transportation solutions.
On February 20, 2024, M&M Residual, LLC, together with other shareholders, ("The Concerned Stockholder Group" owning 4.5% ), nominated five independent directors to the Board, citing concerns over the CEO and Board's leadership amid significant stock decline and operational underperformance. The Concerned Stockholder Group aimed to implement a turnaround strategy focusing on corporate governance, operational improvement, debt reduction, and capital optimization to restore Nikola's value and reputation in the energy and transportation sector. Source
Ancora Alternatives Announces Slate of Director Candidates for Norfolk Southern Corporation (NSC)
Key Summary: On February 20, 2024, Ancora Alternatives announced the nomination of eight candidates for election to the Board at the 2024 AGMMarket Cap: $58 billion | Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States.
On February 20, 2024, Ancora Alternatives announced the nomination of eight candidates for election to the Board at the 2024 AGM. Also, it issued an Investor Presentation titled “The Case for Leadership, Safety and Strategy Changes at Norfolk Southern”
BOARD SEAT/ AGM RESULTS
Nevro Corp (NVRO) entered into a Cooperation Agreement with Engaged Capital
Key Summary: On Dec 11, 2023, Engaged Capital (6%) announced ongoing talks with the Board and management to enhance shareholder value. On Feb 21, 2024, a Cooperation Agreement was signed with Engaged Capital, appointing Kirt P. Karros to the Board and Audit Committee effective Feb 20, 2024Market Cap: $568 million | Nevro Corp., a medical device company, provides products for patients suffering from chronic pain in the United States and internationally.
Background
On December 11, 2023, Engaged Capital (6%) stated that it has engaged, and intends to continue to engage, in communications with the Board and management team regarding opportunities to maximize stockholder value. Source
Update
On February 21, 2024, the company entered into a Cooperation Agreement with Engaged Capital pursuant to which Kirt P. Karros has been appointed to the Board as well as the Audit Committee of the Board effective February 20, 2024. Source
Tarsadia Investments and Twelve Holdings reach agreement with Cue health, Inc (HLTH)
Key Summary: In Aug 2023, Tarsadia Investments & Twelve Holdings (7.4%) express concerns about Cue's financial decline & strategic direction. On Feb 16, 2024, they reached Cooperation agreement with board.Market Cap: $38 million| Cue Health Inc., a healthcare technology company, designs and develops diagnostic platform for diagnostic tests for individuals, enterprises, healthcare providers and payors, and public health agencies.
Background
On August 31, 2023, the Tarsadia Investments and Twelve Holdings formed a group (together 7.4%) and issued a press release containing a letter to the Board. In the letter, Tarsadia Investments expressed grave concerns about the company's financial decline and strategic direction. Tarsadia, which invested in Cue since its Series B round in April 2018, noted that Cue's stock price has plummeted by 97% since its IPO, and its quarterly revenues have similarly fallen. Additionally, Tarsadia cited a prediction by Morgan Stanley that Cue would need to raise $75 million in Q4 2023, resulting in over 50% dilution for existing shareholders. Tarsadia had previously communicated these concerns to Cue's board but claimed no concrete actions had been taken.To address these issues, Tarsadia recommended the board take immediate actions: (i) Conduct a strategic review of the current business plan, (ii) Realign Cue's cost structure to achieve $50 million in annualized cost savings, and (iii) Appoint independent stockholder representatives to the board.
On September 18, 2023, Tarsadia Investments and Twelve Holdings increased their stake to 14.3%
Update
On February 16, 2024, the Tarsadia Investments and Twelve Holdings entered into a cooperation agreement with the company and pursuant to it, the company has agreed to increase the size of the Board and appoint Mr. Reddy as a Class I director, effective immediately, with a term expiring at the 2025 AGM. Concurrent with his appointment to the Board, Mr. Reddy was appointed to serve on the Nominating and Corporate Governance Committee of the Board. The Company will cooperate in good faith with the shareholder group to mutually agree upon an additional individual to serve as an independent director on the Board. Source
ONGOING
The Strategic Organizing Center nominated Board candidates to Starbucks Corporation (SBUX)
Key Summary: On December 19, 2023, The Strategic Organizing Center (SOC) nominated three director candidates for election to the board at the 2024 AGM of shareholdersMarket Cap: $104 billion | Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide.
Background
On December 19, 2023, The Strategic Organizing Center (SOC) nominated three director candidates for election to the board at the 2024 AGM of shareholders. Source
On December 20, 2023, The Strategic Organizing Center (SOC) commented on recent labor-related actions by the company. While Starbucks has made statements about improving relations with employees, the SOC believes the true impact will depend on the Board's actions. They see the recent flurry of activity as an acknowledgment of the Board's past mistakes. Starbucks' own report points out governance issues during union organizing. The National Labor Relations Board (NLRB) has accused Starbucks of unlawfully closing stores. The SOC believes their director candidates can improve human capital management and engage with regulators. Source
On January 12, 2024, The Strategic Organizing Center (SOC) announced the launch of its website www.BrewABetterStarbucks.com and that it has filed a preliminary proxy statement in connection with 2024 AGM. The SOC has nominated three director candidates – Maria Echaveste, Hon. Joshua Gotbaum and Wilma Liebman – for election to the Board at the upcoming Annual Meeting. Source
On January 25, 2024, The Strategic Organizing Center (SOC) sent a letter to the shareholders and stated its concerns about the company's recent actions regarding its treatment of workers and labor issues. Starbucks recently appointed new directors, but they lack expertise in labor law. The SOC argues that the company needs meaningful change in its approach to human capital management to realize its growth objectives. Shareholders are encouraged to vote for the SOC's director candidates to support these changes.
On January 26, 2024, The Strategic Organizing Center (SOC) filed proxy materials seeking support for its nominees. Source
Update
On February 20, 2024, The Strategic Organizing Center issued a investor presentation titled, " Brew a Better Starbucks” detailing the urgent need for change at the Company.
180 Degree Capital Proposes Board Declassification and Nominates Matthew F. McLaughlin for comScore (SCOR) 2024 Annual Meeting
Key Summary: On March 6, 2023, 180 Degree Capital criticized the company's governance, calling for changes. On April 20, it raised concerns about dividend payments. On December 11, it proposed annual director elections starting in 2025. On January 25, 2024, they nominated Matthew F. McLaughlin for the 2024 Annual Meeting.Market Cap: $84 million | comScore is a cross-platform measurement company that measures audiences, brands and consumer behavior everywhere. comScore completed its merger with Rentrak Corporation in January 2016, to create the new model for a dynamic, cross-platform world.
Background
On March 6, 2023, 180 Degree Capital Corp (6%) issued a letter to shareholders and employees of the company to express its disappointment in the company's director compensation policy and called on the Board to make a number of corporate governance changes, including, but not limited to, augmenting the compensation policy for those Board members appointed by preferred stockholders, reducing the size of the Board, replacing over-tenured directors, eliminating the Board's classified structure, and providing additional clarity on the Special Dividend Process. As part of these changes, 180 Degree Capital Corp recommended either the immediate resignation of Brent Rosenthal from the Board or, at least, the removal of his position as Lead Independent Director on the Board.
On April 20, 2023, 180 Degree Capital Corp issued an open letter (refer "Exhibit 2")to the board to express its concerns with certain efforts by the company to pay dividends on the company's Series B Preferred Stock through the issuance of additional Series B Preferred Stock. 180 Degree Capital Corp also requests further reductions in compensation paid to the Board of Directors, the appointment of Jon Carpenter to the, the removal of Brent Rosenthal as Lead Independent Director and that Cerberus, Charter and Liberty Media/Qurate take tangible steps to reverse the destruction in value of common stock since their involvement began in March 2021.
On May 10, 2023, 180 Degree Capital Corp (6%) issued a press release containing an open letter (refer "Exhibit 3") to the preferred stockholders of the company, Cerberus, Charter and Liberty Media/Qurate. In addition to reiterating concerns detailed in the April Press Release, 180 Degree Capital Corp requested Cerberus, Charter and Liberty Media/Qurate take tangible steps to reverse the destruction in value of company’s common stock since their involvement began in March 2021. 180 Degree Capital Corp also continues to request further reductions in compensation paid to the board, the appointment of Jon Carpenter to the board, the removal of Brent Rosenthal as Lead Independent Director.
On November 29, 2023, 180 Degree Capital Corp stated that it intends to nominate at least two industry experts for the 2024 Annual Meeting, supporting Ms. Leslie Gillin's continued service on the Board, and nominating Mr. McLaughlin and Mr. Rendino for the other two director seats. Source
On December 11, 2023, 180 Degree Capital submitted a proposal, requesting that the Board take all necessary steps to declassify the Board so that commencing at the 2025 annual meeting of stockholders, directors are elected on an annual basis. Source
On January 25, 2024, 180 Degree Capital sent a formal letter to the company stating its intent to propose that the Board of Directors be declassified for annual elections starting in 2025. They also nominated Matthew F. McLaughlin for the Board at the fiscal year 2024 Annual Meeting. Source
Update
On February 20, 2024, 180 Degree Capital released a press release and shareholder letter announcing its nomination of Matthew F. McLaughlin for the board at the Annual Meeting. The communication emphasized the need for significant improvements in corporate governance and fresh perspectives from individuals with deep industry experience in the Company’s markets.
Past
On September 28, 2017, Starboard (7.2%) entered into an agreement with the company, pursuant to which, the company appointed Wesley Nichols, Paul Reilly and Bryan Wiener to the Board and agreed to appoint an additional independent director recommended by Starboard. On October 16, 2017, Michelle McKenna-Doyle was appointed to the Board as the additional independent appointee. Source
On January 16, 2018, the company entered into an agreement with Starboard under which the company:
issues $150 million in convertible notes to Starboard in exchange for $85 million in cash and $65 million in outstanding common stock, and grants Starboard an option to acquire up to an additional $50 million in convertible notes
intends to conduct convertible notes rights offering of up to $150 million to all stockholders with $100 million backstopped by Starboard