13D Weekly Report - Mar 11, 2024 to Mar 15, 2024
$EQC, $SBUX, $OPRT, $DIS, $PFBX, $SQFT, $SBOW, $EAF, $CCI, $M
Table of contents
Shareholders voted for each of the 11 Starbucks (SBUX) director nominees at the AGM
Findell Capital Partners nominated Board candidates to Oportun Financial Corporation (OPRT)
Trian Fund and Blackwells Capital Nominated Candidates for Disney (DIS) Board
Joseph Stilwell nominates a director candidate to Peoples Financial Corporation (PFBX)
Zuma Capital Management nominated Board candidates to Presidio Property Trust(SQFT)
Nilesh Undavia Discloses his Views on GrafTech International (EAF)
INITIATED
Land & Buildings Calls on Equity Commonwealth (EQC) to Take Long Overdue Step of Liquidating Remaining Assets and Returning Capital to Shareholders
Key Summary: On March 13, 2024, Land & Buildings Investment Management (3%) proposed liquidating EQC’s remaining properties and returning cash to shareholders, citing the company’s real estate portfolio and market dynamics.Market Cap: $2 billion | Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States.
On March 13, 2024, Land & Buildings Investment Management (3%) issued a letter to the Board proposing the liquidation of EQC’s remaining properties and the return of its cash to shareholders, citing the company’s real estate portfolio, substantial cash holdings, and market dynamics. Land & Buildings highlighted EQC's underperformance, excessive G&A costs, declining interest income, and challenges in the office real estate sector. They urged the Board to announce a complete liquidation of remaining assets and return cash to shareholders to maximize value.
BOARD SEAT/ AGM RESULTS
Shareholders voted for each of the 11 Starbucks (SBUX) director nominees at the AGM
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 shareholders. ISS and Glass Lewis supported company's director nominees. At the AGM, all of the company's director nominees were elected to the Board.Market 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
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.
On March 1, 2024, ISS and Glass Lewis recommended that Starbucks shareholders vote on the WHITE proxy card “FOR” ONLY each of the 11 Starbucks director nominees in connection with the Company's AGM
Update
At the AGM held on March 13, 2024, shareholders elected each of the 11 directors nominated by the Company’s Board of Directors to serve until the 2025 AGM.ONGOING
Findell Capital Partners nominated Board candidates to Oportun Financial Corporation (OPRT)
Key Summary: Findell Capital Partners (5.4%) criticized the company's poor stock performance compared to its competitor, OneMain Holdings, Inc. They suggested replacing board members, reducing expenses, changing leadership, and improving governance. On March 7, 2024, they nominated three director candidates for the 2024 AGM.Market Cap: $128 million | Oportun Financial Corporation provides financial services. It offers personal loans and credit cards.
Background
On November 27, 2023, Findell Capital Partners (5.4%) highlighted that the company's stock had performed poorly compared to its competitor, OneMain Holdings, Inc. Findell Capital Partners believed this was due to wasteful investments and unproductive expenditures by the CEO and a board of directors lacking industry-specific knowledge. Findell Capital Partners suggested the following actions to unlock the company's value: replace board members with subprime lending experience, reduce operating expenditure, replace the then-current leadership team, and adopt shareholder-friendly governance. They intended to work constructively with the Board but reserved the right to take further action if needed to protect shareholder interests. Source
On December 4, 2023, Findell Capital Partners issued a letter to the shareholders expressing serious concerns about Oportun's financial and stock price underperformance under CEO Raul Vazquez.
Valuation Insight
"Oportun's core business is a great one. Under the right cost structure, the Company should generate +$3-$4 in earnings per share and the stock should trade for +$20 a share versus $2.60 a share today."
Update
On March 7, 2024, Findell Capital Partners (6.7%) submitted a letter to the company nominating three director candidates – Susan Ehrlich, Scott Parker, and David Tomlinson – for election to the Board at the 2024 AGM. Findell Capital Partners has been in ongoing constructive and private discussions with the Board and management, aiming to reach a cooperative resolution. Source
Trian Fund and Blackwells Capital Nominated Candidates for Disney (DIS) Board
Key Summary: On Jan 18, 2024, Trian Fund filed proxy materials seeking support for its nominees and proposals. On Jan 3, 2024, Blackwells nominated 3 board candidates against Trian Fund.Market Cap: $206 billion | The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide.
Background
Blackwells Capital
On January 3, 2024, Blackwells Capital nominated three candidates for Disney's board of directors, opposing Trian Fund Management's efforts. Blackwells believed that Trian's campaign was disconnected from Disney stakeholders' needs and driven by personal animus. They also expressed concerns about Trian's association with Ancora Holdings Group, requesting a Disney Board investigation. They argued that their candidates complemented Disney's current leadership better than Trian's nominees. Source
On March 4, 2024, Blackwells Capital released its full investor presentation titled “The Future of Disney.”
Trian Fund
On January 12, 2023, Trian Fund filed proxy materials for the election of Nelson Peltz, its CEO and Founding Partner, to the Board at 2023 AGM. Trian believes that Disney’s recent performance reflects the hard truth that it is a company in crisis with many challenges weighing on investor sentiment. While we acknowledge that Disney, like many media companies, is undergoing a challenging pivot to streaming, Disney also benefits from owning best-in-class intellectual property, a more diversified business mix, and a Parks business that is enjoying all-time high profitability. As such, we believe that the Company’s current problems are primarily self-inflicted and need to be addressed immediately, including poor corporate governance, prro strategy and operations and poor capital allocation. Source
On January 27, 2023, Trian Fund filed proxy materials seeking support for its nominees.
On February 2, 2023, Trian Fund issued a press release and a letter to shareholders related to the company, which Trian also simultaneously published to its website, located at www.RestoreTheMagic.com
On February 9, 2023, Trian Fund congratulated the company on its recently announced operating initiatives, which are a win for all shareholders and broadly align with Trian’s thinking, and, pursuant to which, Trian announced it is withdrawing its nomination of Nelson Peltz to the board of directors of the Company. Source
On November 30, 2023, Trian Fund stated that it had discussions with Disney's CEO and was offered a meeting with the Board. However, Disney declined Trian's request for Board representation, including Nelson Peltz. Trian expressed disappointment in Disney's performance, citing a loss of around $70 billion in shareholder value since February and underperformance compared to peers and the broader market over the last decade. They believe the recent additions to the Board will not restore investor confidence, and Trian intends to present its case for change directly to shareholders. Source
On December 14, 2023, Trian Fund statd that it intends to nominate two independent director candidates for the Board at the 2024 AGM. Trian believes that Disney has underperformed its potential, with lower earnings per share (EPS) despite significant capital investment and lagging margins in its businesses. SourceTop of Form
On January 18, 2024, Trian Fund filed proxy materials soliciting votes for several matters, including the election of Nelson Peltz and James (“Jay”) A. Rasulo as directors for one year (Proposal 1), ratification of PricewaterhouseCoopers LLP as independent auditors for fiscal 2024 (Proposal 2), an advisory vote on executive compensation (Proposal 3), approval of an amendment to the 2011 Stock Incentive Plan (Proposal 4), consideration of shareholder proposals on excessive golden parachutes (Proposal 5) and political expenditures (Proposal 6), approval of a resolution repealing certain Bylaws provisions (Proposal 7), and an advisory vote on board size and related vacancies (Proposal 8). Source
On January 22, 2024, Trian Fund stated that it is posting messages on various social media platforms and its website, www.RestoretheMagic.com regarding its proxy solicitation for The Walt Disney Company's 2024 AGM. It stated, "Despite their significant net worth, Disney's non-management directors collectively own less than $15M in $DIS stock. " Source
Update
On March 11, 2024, Blackwells Capital raised concerns about an undisclosed relationship between The Walt Disney Company and ValueAct Capital Management, L.P. It was revealed that ValueAct had been managing Disney's pension fund assets, earning significant fees, while publicly endorsing Disney's board and management. Blackwells questioned the transparency and ethics of the Board's actions, demanding full disclosure of the relationship and related agreements. Despite their demands, the Board denied releasing this information. Blackwells urged fellow shareholders to demand transparency and proposed three qualified nominees for election at Disney's upcoming annual meeting. Source
Joseph Stilwell nominates a director candidate to Peoples Financial Corporation (PFBX)
Key Summary: Stilwell, a key shareholder, persistently pushed for change, aiming to maximize shareholder value. Despite increased holdings, his board nominees faced resistance. He criticized management for nepotism and poor financial decisions, filing proxies and letters to shareholders. However, his efforts at the AGM fall short. Undeterred, he planned additional nominations for board positions, indicating ongoing activism.Market Cap: $75 million | Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi.
Background:
On January 25, 2023, Joseph Stilwell (11.3%) announced that he served his notice of intent to nominate Rodney H. Blackwell for election as director at the company's upcoming annual meeting, with Stewart F. Peck as the alternate nominee. Also, Stilwell stated his belief that management and the directors have ill served the shareholders, and the company should explore all possibilities to maximize shareholder value. Source
On March 16, 2023, Joseph Stilwell filed proxy materials seeking support for his nominee.
On March 23, 2023, Joseph Stilwell sent a letter to the shareholders expressing his concerns that the company suffers from a toxic brew - nepotism, weak oversight, and a lack of competence in management. He stated that in the last year alone, the Company lost over $6 per share because of inept bond purchases overseen by Chevis Swetman’s son, Tanner. Somehow or other, Tanner was promoted to COO.
On April 12, 2023, Joseph Stilwell (11.7%) filed proxy materials seeking support for his nominee and issued a letter (refer, "Exhibit 20") to the shareholders expressing his concerns over the performance of the management and board.
On April 19, 2023, Joseph Stilwell (11.7%) filed proxy materials seeking support for his nominee and issued a letter (refer, "Exhibit 20") to the shareholders expressing his concerns over the performance of the management and board.
At the AGM held on April 26, 2023, Stilwell's nominee was not elected to the board by the shareholders.
On January 22, 2024, Joseph Stilwell (12.7%) announced his intent to nominate Stewart F. Peck for election to the Board at the 2024 AGM. Source
On March 1, 2024, Joseph Stilwell filed proxy materials seeking support for his nominee.
Update:
On March 12, 2024, Joseph Stilwell mailed a letter to the stockholders seeking vote for his nominee.
Past
Joseph Stilwell, a significant shareholder, consistently advocated for maximizing shareholder value through various means from November 2020 to April 2022, though his board nominees were not successful. His holdings increased to 11.2% by July 2022. In January 2023, with an 11.7% stake, Stilwell nominated Rodney H. Blackwell for directorship and criticized the management and board for nepotism and poor bond purchases overseen by Chevis Swetman's son, Tanner. Despite his efforts, his nominee was not elected to the board at the April 26, 2023 AGM.
Zuma Capital Management nominated Board candidates to Presidio Property Trust (SQFT)
Key Summary: On December 19, 2023, Zuma Capital Management nominated five candidates for the company's Board at the 2024 AGM. On March 13, 2024, they reiterated this, highlighting the need for new Board members to boost accountability, shareholder value, and company performance.Market Cap: $16 million | Presidio is an internally managed, diversified REIT with holdings in model home properties which are triple-net leased to homebuilders, office, industrial, and retail properties.
Background
On December 19, 2023, Zuma Capital Management delivered a letter to the company nominating a slate of five candidates for election to the Board at the 2024 AGM. Source
Update
On March 13, 2024, Zuma Capital Management (6.6%) issued a press release and open letter to the stockholders, nominating five independent candidates for election to the Board at the 2024 Annual Meeting. They argue that refreshing the Board is necessary to restore accountability, enhance shareholder value, and facilitate a turnaround at the company. They also highlighted that the market undervalues the company's assets, attributing this to potential conflicts of interest between the company and its CEO and Chairman of the Board, Jack Heilbron's external business interests. Moreover, they criticized the Board's recent approval of long-term employment contracts for executives, seeing it as a reactive move to shareholder feedback.
Kimmeridge Issues Open Letter to SilverBow (SBOW) Shareholders Outlining Proposed Combination with Kimmeridge Texas Gas
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. On March 13, 2024, it proposed merging with SilverBow Resources.Market Cap: $812 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.
Background
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.
Update
On March 13, 2024, Kimmeridge proposed to merge its Kimmeridge Texas Gas ("KTG") assets with SilverBow Resources. KTG's equity value stands at $1.1 billion, expected to reach $1.4 billion upon the transaction's close. Kimmeridge plans to contribute KTG assets in exchange for 32.4 million shares of SilverBow at $34 per share and inject $500 million of fresh equity at the same price, obtaining 14.7 million shares. This would result in Kimmeridge and its affiliates owning a majority of CombineCo's outstanding shares, totaling 50.3 million. The proposal, accretive to SilverBow shareholders, offers a premium of 8.5% over the closing share price on March 11, 2024, and 21% over the 30-day volume-weighted average price. Kimmeridge is financially prepared to fund the $500 million equity investment and intends to utilize the funds to reduce SilverBow's existing long-term debt. Highly confident letters from Barclays, RBC Capital Markets, and other lenders support Kimmeridge's ability to secure the necessary debt financing for the Transaction. 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.
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: $426 million | GrafTech International Ltd. research, develops, manufactures, and sells graphite and carbon-based solutions worldwide.
Background
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
On February 27, 2024, Nilesh Undavia stated that he plans to nominate candidates for the company's board. Despite seeking collaboration with the incumbent board, his efforts were rebuffed, prompting him to propose adding two new members to ensure an appropriate CEO selection. If the incumbent board obstructs the nomination process, Undavia may consider a "denial of quorum" campaign to push for change.
On March 12, 2024, Nilesh Undavia expressed dissatisfaction with the company's performance in an open letter to fellow shareholders. Undavia highlighted concerns regarding the CEO search process, lack of board oversight, and substantial shareholder value destruction. He pointed out a decline in financial performance and criticized the board's composition and governance practices. Undavia proposed adding a shareholder representative to the board and emphasized the importance of appointing a CEO with industry expertise. He concluded by urging shareholders to evaluate the company's leadership and collaborate to improve its prospects.
Update
On March 15, 2024, Nilesh Undavia filed proxy materials seeking support for himself at the AGM.
Crown Castle Inc. (CCI) Founder Ted B. Miller Leads Slate of Four Directors for Board of Crown Castle Inc.
Key Summary: On Feb 20, 2024, Ted Miller, Crown Castle co-founder, suggested the company to sell its fiber assets for up to $15B and sought a new CEO after Jay Brown's departure. Also he nominated four candidates to the Board.Market Cap: $46 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.
Background
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
On February 28, 2024, Ted Miller, representing Boots Capital Management, LLC, and other stakeholders, released a press statement contesting the company's cooperation agreement with Elliott Investment Management, L.P. Miller filed a lawsuit alleging the agreement, which appointed two Elliott-affiliated directors to the board without requiring Elliott to maintain equity, undermined shareholder interests. Miller urged for a shareholder vote to nullify the agreement, citing concerns over governance and shareholder disenfranchisement. Additionally, Miller had nominated a slate of experienced director candidates and presented plans to optimize the company's assets and operations, including facilitating a sale of its fiber assets.
On March 4, 2024, Boots Capital Management, LLC criticized the company's revised cooperation agreement with Elliott Management, alleging Board misconduct. They claim the agreement doesn't address past issues and demand new independent directors to restore shareholder value.
On March 7, 2024, Boots Capital Management, LLC issued a presentation relating to the company
Update
On March 13, 2024, Boots Capital Management, LLC issued an open letter urging immediate action to restore leadership and enhance shareholder value. Miller proposed a detailed plan including the sale of the fiber business to refocus Crown Castle as a premier tower company. He emphasized the need for experienced tower professionals on the board and highlighted concerns about the current board's lack of operational expertise. Additionally, Miller stressed the importance of maintaining a sustainable dividend and restoring operational excellence to drive long-term success.
Arkhouse Nominates Nine Highly Qualified, Independent Candidates for Election to Macy’s 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: $5.9 billion | Macy's, Inc., an omni-channel retail organization, operates stores, websites, and mobile applications in the United States.
Background
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
Update
On March 14, 2024, Arkhouse Management filed proxy materials seeking support for its nominees.