13D Weekly Report - Jan 22, 2024 to Jan 26, 2024
$XPER, $FSTR, $PFBX, $GIL, $DIS, $OPTT, $SBUX, $PRKA
Table of contents
Rubric Capital nominated Board candidates to Xperi Inc (XPER)
L.B. Foster Company (FSTR) to Nominate Alexander B. Jones from 22NW, LP to the Board at 2024 AGM
Joseph Stilwell nominate a director candidate to Peoples Financial Corporation (PFBX)
Trian Fund Nominates Candidates for Disney (DIS) Board
The Strategic Organizing Center nominated Board candidates to Starbucks Corporation (SBUX)
INITIATED
Rubric Capital nominated Board candidates to Xperi Inc (XPER)
Key Summary: Rubric Capital nominated Board candidates to Xperi IncMarket Cap: $487 million | Xperi Inc. provides software and services in the United States.
On January 22, 2024, Rubric Capital (7.6%) delivered a letter to the company nominating Deborah S. Conrad and Thomas A. Lacey for election to the Board at the 2024 AGM. Source
BOARD SEAT/ AGM RESULTS
L.B. Foster Company (FSTR) to Nominate Alexander B. Jones from 22NW, LP to the Board at 2024 AGM
Key Summary: On February 1, 2022, 22NW Fund disclosed a 9.5% stake, leading to discussions with the company's management. On April 6, 2023, they appointed Alexander B. Jones as a non-voting observer. On January 25, 2024, 22NW Fund entered into an agreement with the company nominating Mr. Jones for a Board seat to replace a retiring director.Market Cap: $262 million | L.B. Foster Company is a manufacturer, fabricator and distributor of products and services for the rail, construction, energy and utility markets.
Background
On February 1, 2022, 22NW Fund disclosed a 9.5% active stake in the company and stated that it has engaged, and intends to continue to engage in communications with the management team and Board regarding means to enhance stockholder value and improve the company’s corporate governance. Source
On April 6, 2023, 22NW Fund entered into a cooperation agreement with the company and pursuant to it, Mr. Alexander B. Jones, Research Analyst at 22NW Fund, was appointed to serve as a non-voting observer to the board effective immediately.
Update
On January 25, 2024, 22NW Fund (11.9%) and the company entered into a cooperation agreement. This agreement stipulates that Alexander B. Jones will be nominated as a candidate for the Board at the 2024 Annual Meeting, with his term lasting until the 2025 Annual Meeting. This nomination is to fill the vacancy left by the retiring director, Dirk Jungé. Additionally, during the Standstill Period, if elected, Mr. Jones will be appointed to at least one Board committee and considered for committee assignments during the annual review of committee composition.
Past
On February 12, 2016, Legion Partners (9.6%) secured one board seat through mutual agreement, and on January 20, 2021, it reduced its stake to 6.01%.
ONGOING
Joseph Stilwell nominate a director candidate to Peoples Financial Corporation (PFBX)
Key Summary; On Jan 22, 2024, Joseph Stilwell (12.7%) nominated Stewart F. Peck for the 2024 AGM. In the past, Stilwell actively pursued shareholder value but faced board nominee challenges from Nov 2020 to Apr 2022, with holdings reaching 11.2% by Jul 2022. In Jan 2023, he nominated Rodney H. Blackwell (11.7%), critiquing board actions, but his nominee wasn't elected at the Apr 26, 2023 AGMMarket Cap: $77 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.
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
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.
Browning West Demands CEO Reinstatement and Special Meeting Amidst Termination Concerns at Gildan Activewear (GIL)
Key Summary: Browning West (5%) is concerned about CEO's abrupt termination and board's choices. They demand CEO reinstatement and may call a Special Meeting for changes. On Jan 23, 2024, Browning West voiced concern over Board's actions, citing value destruction, entrenchment tactics, and delay of Special Meeting, vowing to improve governance.Market Cap: $5.4 billion | Gildan Activewear Inc. manufactures and sells various apparel products in the United States, North America, Europe, Asia-Pacific, and Latin America.
Background
On January 8, 2024, Browning West (5%) stated its concerns about the abrupt termination of CEO Glenn Chamandy and the appointment of Vince Tyra as his replacement by the company's board. It issued public letters (Dec 14, 2023, Dec 20, 2023, Dec 29, 2023) expressing its concerns and demands, including reinstating Chamandy, removing the board chair, and appointing a shareholder representative. Further, it stated that if the board continues to ignore its feedback, shareholders plan to requisition a Special Meeting to vote on removing directors and appointing its five candidates, which would potentially lead to changes in leadership. Source
Valuation insight
Browning West, in its letter dated December 14, 2023, opined that under Mr. Chamandy’s leadership, Gildan’s share price was poised to be worth $60 to $80 USD over the next two years, which represents an approximately 80% to 140% increase from the current price, which assumes that Mr. Chamandy delivers $4 of earnings per share and the stock re-rates to its historical valuation range.
On January 9, 2024, Browning West (5%) delivered a letter to the company to requisition a Special Meeting of Shareholders, seeking shareholder support at the upcoming Special Meeting to, (i) Remove eight of the incumbent directors, (ii) Appoint eight highly qualified director candidates to the Board.
Update
On January 23, 2024, Browning West (5%) highlighted its concern regarding the Board's actions. It mentioned the requisition of a Special Meeting to vote on the reconstitution of the Board due to perceived value destruction and questionable leadership decisions. The Board was accused of resorting to entrenchment maneuvers, including seeking to invalidate Browning West's requisition based on antitrust allegations. The letter also criticized the Board's conduct, misinformation campaigns, and attempts to delay the Special Meeting. Browning West expressed determination to protect its investment and improve corporate governance at the company. Source
Trian Fund Nominates Candidates for Disney (DIS) Board
Key Summary: Trian Fund filed proxy materials seeking support for its nominees and proposals. Blackwells nominated 3 board candidates against Trian Fund.Market Cap: $171 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
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 20, 2023, Trian Fund filed proxy materials seeking support for its nominees.
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
Update
On January 22, 2024, Blackwells Capital filed proxy materials seeking support for its nominees.
On January 23, 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
Paragon Technologies Challenges Ocean Power Technologies' (OPTT) Management and Strategy, Urges Shareholder Action
Key Summary: Paragon Technologies (3.9%) has raised concerns about Ocean Technologies' financials and initiated legal action following the company's declaration of their nomination letter as invalid. Despite Paragon continuing to seek votes for its nominees, the company has urged shareholders to ignore the nomination letter, stating that such votes will not be counted.Market Cap: $18 million | Ocean Power Technologies, Inc. develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves in North America, South America, Europe, and Asia..
Background
On July 7, 2023, Paragon Technologies (3.9%) provided a letter to the stockholders with respect to its views regarding the Company’s financial condition and the performance of the board. It expressed its concerns about the company's ongoing cash burn and lack of a coherent plan for profitability. It highlighted the company's history of net losses since its inception in 1994, declining share price, failed commercialization efforts, and high operating expenses. Paragon intends to provide a slate of director nominees with the aim of reducing losses, addressing the cash burn, and implementing a go-to-market strategy to create profitable operations at the company.
On July 14, 2023, Paragon Technologies (4%) expressed its concerns about alleged wrongdoing and mismanagement by the board and management. It has requested access to the company's records and will pursue litigation if the board does not comply. Furthermore, it stated that it may make binding or non-binding stockholder proposals or may nominate one or more individuals as nominees for election to the board. Source
On July 17, 2023, Paragon sent an Inspection Demand to the company, requesting access to the company's books and records for the purpose of investigating apparent wrongdoing and/or mismanagement by the Board and/or management. Source
On July 27, 2023, Paragon filed a complaint in the Delaware Court of Chancery to enforce for inspecting Company's books and records.
On August 2, 2023, Paragon Technologies, Inc. issued a press release regarding the company, demanding clear explanations from the board on how the company will fund operations beyond July 31, 2024.
On August 11, 2023, Paragon Technologies (4%) calls on the company to REFRAIN from ALL future equity share sales that will dilute shareholders and immediately announce a significant cost cutting plan to demonstrate the Board’s commitment to protecting shareholder value. Source
On August 25, 2023, Paragon demands corporate governance adherence and shareholder value enhancement, urging to:
o Reinstate the Company’s bylaws to their original form prior to Paragon’s calling out the Company’s worsening financial performance
o Terminate the Company’s poison pill and grant Paragon its limited waiver
o Allow Paragon, as is Paragon’s right as a shareholder, to examine the Company’s books and records
o Reconstitute its Board to appoint Paragon’s directors to the Company’s Board.
On August 25, 2023, Paragon Technologies notified its intent to nominate five directors for the company's board at the 2023 annual meeting. On August 29, 2023, Paragon Technologies submitted a second request for an exemption related to the "Section 382 Tax Benefits Preservation Plan" adopted by the company's board on June 29, 2023, limiting ownership to 19.9% of the company's outstanding shares. The company's board has not responded to these exemption requests. Source
On October 9, 2023, Paragon Technologies stated that it has initiated legal action against the board and CEO for alleged breach of fiduciary duties. They sought to appoint three directors to the board and requested an exemption from poison pill provision. Paragon criticized the management for self-serving actions and misleading statements. Source
On October 20, 2023, the Delaware Court of Chancery ruled in favor of Paragon Technologies (OTC PINK:PGNT), ordering Ocean Power Technologies (OPT) to provide Paragon with certain books and records for an investigation. Paragon had made a books and records demand on July 17, 2023, which OPT initially refused, leading to litigation. During the trial, Paragon raised concerns about OPT's financial losses, expenses, and director/officer compensation, as well as actions by OPT's board seemingly aimed at interfering with Paragon's efforts to elect new directors. The Court found that Paragon had a credible basis to suspect wrongdoing and rejected OPT's claim of an improper motive for the demand. Sham Gad, Chairman of Paragon, expressed satisfaction with the decision and urged OPT to work constructively with shareholders. Source
On October 24, 2023, Paragon Technologies sent a letter to the independent directors of the company, raising concerns about recent decisions made by the board. The letter questioned whether the actions taken by the directors are in the best interest of shareholders and suggests that these actions may be aimed at preventing certain director candidates from being presented to shareholders. Paragon highlights several actions, including the adoption of new by-laws, the implementation of a poison pill, engagement of multiple law firms and a proxy defence firm, and the refusal to provide access to company records. Paragon calls for transparency and questions the board's spending decisions in light of OPT's financial situation.
On November 13, 2023, Paragon Technologies notified the Company that Robert J. Tannor notified them of his withdrawal as a nominee, due to health reasons that he is still recovering from, for election to the Company’s board of directors at the Company’s 2023 AGM. Paragon Technologies intends to proceed to nominate the four other candidates previously notified to the Company. Source
On November 17, 2023, a Delaware Chancery Court ruling and evidence suggest a gap between OPT's public statements and financial reality. Paragon calls on OPT to implement a substantial cost-cutting plan and cease issuing equity to safeguard shareholder interests. Source
On November 28, 2023, Paragon Technologies filed proxy materials seeking support for its nominees.
On November 30, 2023, the Delaware Court of Chancery denied Paragon's request for injunctive relief filed on October 9, 2023. As a result, Paragon's nominations and exemption request remain rejected, and they cannot nominate their candidates for the OPT Board at the 2023 Annual Meeting. Source
On December 4, 2023, Paragon Technologies stated that it intends to move forward with its election contest at the Company’s 2023 annual meeting of shareholders (scheduled by the Company to be held on January 31, 2024) and intends to nominate its four director candidates at the annual meeting. Source
On December 11, 2023, Paragon Technologies reiterated its concerns and urges shareholders to vote for its nominees. Source
On December 18, 2023, Paragon Technologies reiterated its concerns and urges shareholders to vote for its nominees. Source
On December 21, 2023, the company announced shareholders may receive materials from Paragon Technologies but advised discarding them, as votes for Paragon's nominees on the blue proxy card will not be counted
On December 29, 2023, Paragon Technologies reiterated its concerns and urges shareholders to vote for its nominees. Source
On January 4, 2024, Paragon Technologies, Inc. reminded shareholders to DISREGARD any WHITE proxy from OPT and issued a presentation on how to vote the BLUE proxy card.
Valuation insight
Paragon believes OPT could be worth +$3 a share, or 10x return, with an improved operating cost structure, disciplined capital allocation, and a realigned focus on potential growth of Marine Advanced Robotics.
On January 15, 2024, Paragon Technologies issued a presentation reiterating its concerns and reminded shareholders to vote for its nominees.
On January 18, 2024, Paragon Technologies (4.8%) challenged OPT's CEO, Phillip Stratmann, over his conflicting statements regarding OPT's profitability in 2025. Stratmann had claimed OPT would be profitable using current capital, but Paragon pointed out discrepancies between this and OPT's EBITDA breakeven projection, questioning the lack of a clear cost-cutting strategy. Paragon criticized Stratmann's management, noting OPT's ceased R&D disclosures since he became CEO and escalating expenses. They accused OPT's Board of self-serving actions and misleading shareholders, failing to commercialize products or present a viable strategy. Paragon urged shareholders to vote using their BLUE proxy card for change and transparency in OPT's management and strategy. Source
Update
On January 22, 2024, Paragon Technologies, Inc. issued a presentation relating to Ocean Power Technologies, Inc
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
Update
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
Focused Compounding Calls for Special Shareholder Meeting and Proposes Significant Bylaw Revisions at Parks! America, Inc (PRKA)
Key Summary: In January 2020, Focused Compounding disclosed a 17.01% stake and requested discussions. In December 2023, they demanded a special shareholder meeting.Market Cap: $31 million | Parks! America, Inc., through its subsidiaries, engages in acquiring, developing, and operating local and regional theme parks and attractions in the United States.
Focused Compounding Fund
Background
On January 28, 2020, Focused Compounding Fund disclosed 17.01% and sent a letter to the Board seeking discussions with the management, Board and representatives of the company.
On December 22, 2023, Focused Compounding (38.5%) demanded a special shareholder meeting from the Company. The meeting will address five proposals: (i) Repealing certain provisions of the Bylaws to restore them to their 2012 form if amended before the proxy solicitation is complete, (ii) Removing all seven members of the Board as per Section 4.9(a) of the Bylaws, (iii) Amending Section 4.7 of the Bylaws regarding vacancies on the Board, (iv) Electing new Board members, Andrew Kuhn, Geoff Gannon, and James Ford, and (v) Authorizing Focused Compounding Fund to adjourn the meeting if needed for the proposed changes. Source
On January 4, 2024, Focused Compounding filed proxy materials seeking support for its nominees.
On January 18, 2024, Focused Compounding sent a letter to the Board insisting on holding a special election, criticizing the Board's legal maneuvers and reliance on Nevada law to maintain their positions. It accused the Board of avoiding direct shareholder communication and instead using legal strategies to remain in power. The letter emphasized the importance of democratic engagement and challenged the Board to run a genuine campaign to win over shareholders. It criticized the Board's lack of honor and integrity, questioning their reliance on technicalities rather than shareholder interests.
Update
On January 26, 2024, Focused Compounding filed proxy materials seeking support for its proposals.
Past
Nicholas A. Parks
On January 30, 2019, Nicholas A. Parks (12.06%) entered into discussions with a private equity firm to discuss strategic options involving the company’s stock. Mr. Parks stated that he wishes to continue such discussions in hopes of the following:
To purchase additional shares of the outstanding stock.
To have an active role in company decisions in order to maximize shareholder value.
On September 23, 2019, Nicholas A. Parks (6.28%) stated that he believes the company should,
Acquire a scalable business in order to grow the company’s revenue over time. If unable to identify appropriate acquisitions, to return capital to shareholders via a special dividend or by purchasing its own stock
On January 28, 2020, Nicholas A. Parks entered into a Stock Purchase Agreement with Focused Compounding Fund, LP for the sale of 4,110,000 shares of Common Stock. As a result of the closing of the transactions, Nicholas A. Parks beneficially own approximately 2.00% of the outstanding Common Stock. Source
Marlton Wayne
On December 17, 2018, Marlton Wayne (5.04%) sent a letter to the Board noting its concerns that the company’s public equity trades below its intrinsic value and offering potential solutions to substantially increase stockholder value. In the letter, Marlton outlined a proposed change in capital allocation and corporate governance that they believe is needed to put the company on a path that will reward stockholders:
Return of capital of $1,500,000 through either a Special Dividend of $0.0201 per share representing 13.8% of the market capitalization based on the current share price of $0.1451 or a Modified Dutch Auction Tender.
Forming a Special Committee of Independent Board Members to explore all strategic alternatives to maximize stockholder value, including the disbursement of a Special Dividend, Modified Dutch Auction Tender and/or the sale of the company.
On January 14, 2019, Marlton Wayne (5.04%) sent a letter reiterating its concerns that the company’s current capital allocation strategy and corporate governance are causing the company’s equity to trade at a significant discount. to the Board.
On July 22, 2019, Marlton Wayne (5.04%) delivered a letter to the company demanding the inspection of certain of the company’s books and records